Failure of Tata Nano

The Failure Story Of Tata-Nano
TAMIL NADU NATIONAL LAW

SCHOOL
THE FAILURE STORY OF NANO
SUBMITTED IN THE PARTIAL FULFILLMENT OF B.COM. L.L.B (Hons.), SECOND SEMESTER
Submitted to: PROF. P. Murugesan

Submitted by: Karan Kumar Khetani
Registration no: BCO140026
1 | Page
All Review of literature articles have been studied from Online ISSN 23200073 VOL. 3, ISSUE 5 (May 2014).
SUPERVISORS CERTIFICATE
This is to certify that the Project Report entitled: Failure Story of Tata-Nano submitted to
the Tamil Nadu National Law School in partial fulfilment of the requirements for B.COM. LL.B
(Hons.), second semester is an original and bona-fide research work carried out by Karan
Kumar Khetani under my supervision and guidance. No part of this study has been submitted to
any University for the award of any Degree or Diploma whatsoever.
______________________
PROF. MURUGESAN
2 | Page
PREFACE
This project is intended to carry out an extensive research on the given topic by the supervisor.
The research and analysis conducted by the researcher is bona-fide and purely for academic
purposes. The borrowed facts, data and opinions presented are from the internet media.
Every effort is made to keep the project error free. I would gratefully acknowledge the
suggestions to improve the project to make it more useful.
3 | Page
ACKNOWLEDGEMENTS
On the successful completion of this project, I would like to thank our respected mentor, our
Business Economics Lecturer, PROF. P. MURUGESAN who despite all of his pre-occupations,
provided me all the assistance I needed for the accomplishment of this project and guided me
while I tread on the tenebrous boulevard of ignorance. Had it not been for his support I wouldnt
be able to grasp the cognizance of something as enthralling as this. I thank him profusely for
providing me this engrossing topic to work on which helped me to learn and relearn, to explore
and re-explore our knowledge of the English literature.
I also thank our honourable Vice Chancellor, Mr. Murugravel, and our esteemed Registrar, for
their inexplicable greatness to find time to educate us as and when they find an opportunity.
I would like to convey our gratitude towards our friends and batch mates who have rendered
me their valuable time and without their help this project would not have been in its present
shape and form.
No work is complete w
With solo endeavour, neither is mine. I thank each and every non-teaching staff of TNNLS for
their unconditional support and infinitum. I would also like to convey our thanks to the Library
Staff of TNNLS.
I am grateful to The Almighty, who has given me enough strength and blessings to work hard
and make it to the best of our ability.
Last but not the least; I thank my parents who have given me a chance to study in this esteemed
University, a heaven for legal edification.
______________________
Karan Kumar Khetani
TABLE OF CONTENTS
4 | Page

CHAPTER
1......................................................................................................................................08
Introduction..................................................................................................................................
CHAPTER
2......................................................................................................................................13
Review of literature......................................................................................................................
CHAPTER
3......................................................................................................................................19
Data collection..............................................................................................................................
CHAPTER
4......................................................................................................................................20
Data Ananlysis..............................................................................................................................
CHAPTER 5..................................................................................................................................31
Conclusions............................................................................................................... ............
.............
CHAPTER 6..................................................................................................................................34
BIBLIOGRAPHY..............................................................................................................................
.
CHAPTER 7..................................................................................................................................35
ANNEXURE....................................................................................................................................
.
5 | Page
TABLE OF GRAPHS
TABLE TITLE
Age group of TATA NANO customers
Income group of TATA NANO customers
NANO VS BIKE PREFERENCE
Feature attracts TATA NANO Buyers
No. of Customers who agree that TATA NANO is cheap,
PAGE NO
20
21
22
24
25
economical, affordable and compact car as compared to other

cars in small car segment
How many customers agree that TATA NANO is peoples car
Comparing gender group of the customers and usage as taxi of
27
27
TATA NANO
Comparing gender and will the customers recommend TATA
28
NANO to their family and relatives

Comparing occupation and tendency to purchase after the
29
price hike of TATA NANO
6 | Page
CHAPERISATION
CHAPTER 1
Chapter 1 titled as introduction which tells about the idea on which the research is done,
the research objectives, methodology used and the research limitations.
CHAPTER 2
Chapter 2 titled as review of literature includes the theory on consumer behavior,
scholarly articles by other researchers on the same topic and researchers comparison.
CHAPTER 3
Chapter 3 titled as Data collection states The Instrument for data collection, in the form
of a Structured Questionnaire, was designed to elicit information on demographic and
psychographic aspects of the respondents.
CHAPTER 4
Chapter 4 titled as Data analysis summarizes all the tables and graphs prepared using
IBM SPSS 20.
CHAPTER 5
Conclusion states the juice extracted out of the research and answers of the objectives.
7 | Page
CHAPTER 1
INTRODUCTION
The Tata Nano is a city car manufactured by Tata Motors. Made and sold in India, the
Nano was initially launched with a price tag of 100,000 (US$1,600) which was
ultimately increased with time. Designed to lure India's burgeoning middle classes away
from two-wheelers, it received much publicity.
Expectations created for the car during the run up to its production may have been out of
proportion with its realized success. A 2008 study, by Indian rating agency CRISIL,
thought the Nano would expand the nation's car market by 65%, but, as of late 2012,
news reports have detailed the underwhelming response of the Indian consumer to the
offering; sales in the first two fiscal years after the car's unveiling remained steady at
about 70,000 units although Tata appears intent on maintaining a capacity to produce the
car in much larger quantities, some 250,000 per year, should the need arise.
It was anticipated that its 2009 debut would greatly affect the used car market, and prices
did drop 2530% prior to the launch. Sales of the Nano's nearest competitor, the Maruti
800, fell by 20% immediately following the unveiling of the Nano. It is unknown if the
Nano has had a lasting effect on the prices of and demand for close substitutes, however.
In July 2012, Tata's Group chairman Ratan Tata, who retired in January 2014, said that
the car had immense potential in the developing world while admitting that early on
opportunities were wasted due to initial problems.
They said it couldnt be done. But Tata went ahead and did it anyway. They got out a car
that cost lakh rupees. And although the prices have escalated recently due to surges in
raw material costs, the Tata Nano is certainly a revolutionary product. The idea for the
Nano was conceived sometime in 2003, and the car hit the roads in 2009. Its been six
years since the launch, but has the Nano lived up to its promise as a product? It has. And
has it lived up to all the hype? It hasnt. That sounds a little paradoxical. So lets take a
closer look at this phenomenon.
The idea behind the Tata Nano itself was revolutionary. While the execution hit some
roadblocks, the product was an engineering marvel without a doubt. It brought together
cost, fuel and space efficiencies in a way like no other while still retaining world-class
features and a sleek design. True, there were a few safety issues (no air bags) and the fire
incidents in a few cars. There was also the lack of power, low stability, less boot space
and small fuel tank. But all in all, the price tag more than compensated for these.
8 | Page

First, Ratan Tata called a meeting of his top parts suppliers and, after showing them the
early, earnest but flawed prototypes, asked them to help. Companies including
Germany's Bosch, which makes the computer that is the heart of car's engine, were
skeptical. So were local Indian players.
But Tata persisted, pointing out that not only could a company's specific developments
for the Nano help to make history but they could also improve their companies'
businesses and bottom lines. Soon most of Tata's traditional suppliers were on board.
Rane Group, for instance, makes a rack and pinion steering system. It focused on
reducing the weight of the materials used, replacing the steel rod of the steering with a
steel tube -- a major cost-reducer. Typically, the product is made of two pieces, but it
was redesigned as one to save on machining and assembling costs.
According to Harish Lakshman, director of the $317 million company: "The world has
seen this sort of integration of two pieces into one, but applied differently -- not for a
new car, and not to reduce costs."
GKN Driveline India, a subsidiary of global auto parts leader GKN, made the driveshaft
-- the component that transfers power from the engine to the wheel. The team spent a
year developing 32 experimental variants to create the perfect driveshaft for the Nano. It
roped in designers from the company's French and Italian operations and changed the
design to make it lighter and easier to manufacture.
For the Nano's rear-wheel drive system, GKN designed a smaller diameter of shaft,
which made it lighter and saved on material costs. "We thought if we were successful in
this, we could dictate terms to the market, and every other car manufacturer would want
to work with us," says Rajendra Ojha, chief executive of GKN Driveline India.
Taking the pulse of the project
All the suppliers have similar stories. And although none would disclose specific cost
savings, most stuck to Tata's mandate to cut costs. That was, as Kant acknowledges, the
biggest hurdle for the company -- "then, now, and in the future," -- particularly as the
price of raw materials like steel have more than doubled in the past four years, and the
company has to follow new, tighter industry regulations.
9 | Page

Kant, who recently led negotiations to acquire luxury auto brand Jaguar Land Rover,
has little time to get involved in day-to-day details of Tata's many projects. However,
with the Nano, "every cost, every component price, has to be run by me," he says.
Coordinating the vendors with Tata Motors' team was a whole new exercise in logistics.
Wagh quickly realized it was necessary to bring everyone on board, "else it leads to lastminute heartache and delays."
Every morning, he would spend an hour or two on the floor of the Pune factory, insisting
that everyone involved -- designers, manufacturing teams, vendor development people
-- be there to accelerate decision-making and problem-solving. "We had to have the
pulse of the project and know exactly where the hurdles were," Wagh remembers.
Over time, Wagh's team grew to comprise some 500 engineers, an impractically large
group to gather on a daily basis. So instead, a core team of five engineers gathered every
day at 3 p.m. to discuss the latest developments. Each engineer represented a different
part of the car: engine and transmission, body, vehicle integration, safety and
regulation, and industrial design.
Attention to detail pays off
Fitting the parts of the car together required lots of little, head-breaking details, recalls
Wagh. The engine, for instance, was designed three times. Initially, Wagh thought they'd
buy an off-the-shelf engine and so studied all the small-capacity engines available. They
were unsuitable, so in early 2005 he decided to build his own.
The first was a 540 CC engine that, when fitted on the prototype, lacked the necessary
power. So its capacity was increased by 9%, then by another 9%, before Wagh finally
settled on a 623 CC engine. Then the foot pedal had to be realigned to create more
legroom.
The body had to be changed because Ratan Tata, over six feet tall himself, wanted it to
be easy for tall people to get in and out of the car. "Imagine the plight of the body
designer -- he went through hundreds of iterations, then at the last minute the car
length was increased by 100 millimeters!" Wagh says.
10 | P a g e

The attention to detail paid off: When the car rolled onto the dais at the Auto Show in
New Delhi in January, and Ratan Tata stepped out of the driver's seat with ease, it made
an immediate impact.
What shook the automobile world most was the fact that the designers seem to have
done the impossible: The sleek, sophisticated Nano doesn't look flimsy or inexpensive. If
it had been an upgraded scooter on four wheels, Tata still would have been applauded
for making a family of four safer on Indian roads. The Nano, however, affords both
safety and status.
"The innovation wasn't in technology," Kant recalls. "It was in a mindset change." The
Nano, he adds, has put an end to all discussions of having variants of scooters or
quadricycles as passenger vehicles on India's roads.
11 | P a g e

OBJECTIVES:
A. To understand the reasons behind failure of such a good product.
B. To scrutinize the problem in economic context.
C. To understand what should have been done to make it a sheer success.
METHODOLOGY
The researcher has done this project on the topic The Failure story of Tata Nano. He
has adopted doctrinal research based on the primary sources for the purpose of my study.
LIMITATIONS
A. The TIME limitation As a student it was not possible to devote such time to
the search in which each and have geographical indicator would have been
taken into consideration.
B. The MONEY limitation As a student it wasnt possible to gather funds for an
extensive research.
Hence this research was limited only to 50 TATA NANO customers on the
basis of random- convenience based sampling.
CHAPTER 2
Review of Literature
12 | P a g e
What Influences CONSUMER BEHAVIOUR

The aim of marketing is to meet and satisfy target customers needs and wants. The field
of consumer behaviour studies how individuals, groups, and organizations select, buy,
use, and dispose of goods, services, ideas, or experiences to satisfy their needs and
desires.
The starting point for understanding consumer buying behaviour is both when marketing
and environmental stimuli enter the buyers consciousness. In turn, the buyers
characteristics and decision process lead to certain purchase decisions. The marketers
task is to understand what happens in the buyers consciousness between the arrival of
outside stimuli and the buyers purchase decisions.
Culture is the most fundamental determinant of a persons wants and behaviour. A child
growing up in the United States is exposed to these broad cultural values: achievement
and success, activity, efficiency and practicality, progress, material comfort,
individualism, freedom, external comfort, humanitarianism, and youthfulness.
Social classes are relatively homogeneous and enduring divisions in society and their
members share similar values, interests, and behaviour. Social classes reflect income as
well as occupation, education, and other indicators. Also, within the culture, persons are
perceived as occupying inferior or superior positions according to social class. Social
class is indicated by a cluster of variables rather than by any single variable. Still,
individuals can move from one social class to anotherup or downduring their
lifetime. Because social classes often show distinct product and brand preferences, some
marketers focus their efforts on one social class.
Reference groups consist of all of the groups that have a direct (face-to-face) or indirect
influence on a persons attitudes or behaviour. Groups that have a direct influence on a
person are called membership groups. Secondary groups, such as professional and trade
union groups, tend to be more formal and require less continuous interaction
People are also influenced by groups to which they do not belong. Inspirational groups
are those the person hopes to join; dissociative groups are those whose values or
behaviour an individual rejects.
The family is the most important consumer-buying organization in society. The family of
orientation consists of ones parents and siblings. From parents, a person acquires an
orientation toward religion, politics, and economics as well as a sense of personal
ambition, self-worth, and love. Marketers are interested in the roles and relative influence
13 | P a g e

of the husband, wife and children in the purchase of a large variety of products and
services.
A person participates in many groups, such as family, clubs, or organizations. The
persons position in each group can be defined in terms of role and status. A role consists
of the activities that a person is expected to perform. Each role carries a status. Supreme
Court justice has more status than a sales manager, and a sales manager has more status
than an administrative assistant. In general, people choose products that communicate
their role and status in society.
The third factor is personal characteristics, including the buyers age, stage in the life
cycle, occupation, economic circumstances, lifestyle, personality, and self-concept.
People buy different goods and services over a lifetime. Consumption is shaped by the
family life cycle. The traditional family life cycle covers stages in adult lives, starting
with independence from parents and continuing into marriage, child-rearing, empty-nest
years, retirement, and later life.
Marketers often choose a specific group from this traditional life-cycle as their target.
The aim of marketing is to meet and satisfy target customers needs and wants. The field
of consumer behaviour studies how individuals, groups, and organizations select, buy,
use, and dispose of goods, services, ideas, or experiences to satisfy their needs and
desires.
Before developing their marketing plans, marketers need to use both rigorous scientific
Procedures and more intuitive methods to study consumer behaviour, which is influenced
By four factors: cultural (culture, subculture, and social class), social (reference groups,
family, and social roles and statuses), personal (age, stage in the life cycle, occupation,
economic circumstances, lifestyle, personality, and self-concept), and psychological
(motivation, perception, learning, beliefs, and attitudes). Research into all of these factors
can provide clues as to how to reach and serve consumers more effectively.
To understand how consumers actually make their buying decisions, marketers must
identify who makes and influences the buying decision. People can be initiators,
influencers, deciders, buyers, or users, and different marketing campaigns might be
targeted to each type of person. Marketers must also examine buyers levels of
involvement and the number of brands available to determine whether consumers are
engaging in complex buying behaviour, dissonance-reducing buying behaviour, habitual
buying behaviour, or variety-seeking buying behaviour.
14 | P a g e
The five-stage consumer buying process consists of problem recognition, information

search, and evaluation of alternatives, purchase decision, and post purchase behaviour.
The marketers job is to understand the buyers behaviour at each stage and what
influences are operating. The attitudes of others, unanticipated situational factors, and
perceived risk may all affect the decision to buy, as will consumers levels of post
purchase satisfaction, the companys post purchase actions, and consumers post purchase
use and disposal of the product. Satisfied customers will continue to purchase;
dissatisfied customers will stop purchasing the product and are likely to spread the word
among their friends. For this reason, smart companies work to ensure customer
satisfaction in every stage of the buying process.
Conclusions of other researchers
Samson Itamer (1992) has observed that purchase decisions of cars are determined on
the basis of both absolute attributes of the alternatives and their relative positions within
the particular choice set under consideration. He has further suggested that consumers are
less likely to choose alternatives that are offered with unneeded features or premium even
when the features do not reduce the value of the product in any way.
William B Dodds (1991) investigated the effects of the intrinsic cues of price brand and
store information on consumer perception of car quality. They found that price had a
positive effect on perceived quality but a negative effect on perceived value and
respondents willingness to buy.
Anil Thakraney: Nano: Manufacturing success, marketing failure
06 Jun, 2012
Observed that the moment they positioned it as the poor mans car, they took the sex out
of the equation. Even at a low cost, a cars association with status and pride must be
maintained. No one wants to be perceived as a loser when it comes to his car, a persons
most visible possession. This simple little consumer insight eluded such highly paid and
experienced marketing minds.
15 | P a g e

The bad news is that the damage is done. Whatever tricks the Tata Nano marketing guys
have up their sleeves, it will be very difficult to erase the poor mans car image. I would
like to meet Mr. Tata and discuss this, but he seems to be allergic to desi journos.
Aradhana Krishna (1994) viewed that buyers purchase behavior can be influenced not
only by the current price of a product but also by what price they expect in future as in
case of automobiles i.e. cars.
Gerald D Bell (1967) studies how a new car buyer feels about his purchase and what
factors determine his reactions when he begins living with his new car. The finding of
this investigation suggests the effect of a customers self confidence his personality and
the quality of service he receives upon his cognitive dissonance.
Edward L Grubb and Greg Hupp (1968) test a methodology for measurement of self
concept and consumer behavior in comparable terms and therefore to further substantiate
the relationship of self theory to consumer behavior. The author suggest that the owner of
a specific make of car perceive themselves as having self concepts similar to those of
others who own the make of an automobile.
Darlin Doman (1983) in the article has mentioned that satisfied new car buyers discuss
their experiences with eight people dissatisfied buyers complain to an average of twenty
two people.
C. W Park et al (1994) assessing the consumer knowledge has observed that consumer
knowledge is an important construct in understanding consumer behavior such as
information search and information processing. Increase in self assessed knowledge was
associated with decrease in utilization of sales peoples recommendations in automobiles.
Andrew et al (1996) assess number of different measures of consumer expertise by
examining their ability to predict correct choices in the stimulus based choice tasks.
Pavleen et al (2003) in their article have perceived that the family of a reference group
has one of the strongest most immediate and most pervasive effects on a consumers
personality motivation and attitude. The author has affirmed that from the marketing
point of view investigating the family as a consumption unit becomes crucial since
attitudes towards saving spending and even towards car brands are often mobilized by the
family.
16 | P a g e

Richard et al (2003) in their large scale national study investigates the influence of
monthly payment incentives on the decision making process of the cars.
Vivek Kaul Nov 18, 2014 11:14 IST
Bill Gates wrote a blog. He titled it The Best Business Book I've Ever Read . As he wrote
"Not long after I first met Warren Buffett back in 1991, I asked him to recommend his u
book about business. He didn't miss a beat: "It's Business Adventures, by John Brooks,"
he said. "I'll send you my copy." I was intrigued: I had never heard of Business
Adventures or John Brooks."
The hype around the car was huge. When the car was launched in 2009, the entire world
media was in Delhi for the launch. In fact, before the car was launched the rating agency
Crisil said that the car could expand the Indian car market by 65%. People who had cars
were already worried about the traffic on the roads getting worse than it already was,
because of the Nano.
Before the car was launched in 2009, prices in the used car market fell by 25-30%, given
Nano's expected price point of Rs 1 lakh. Nonetheless, Nano could not live up to the
hype. In a May 2014 news report, the Business Standard pointed out that "Launched in
2009, Nano sales between 2010-11 and 2012-13 constituted 23-24 percent of Tata
Motors' total sales. But Nano sales declined dramatically after peaking to 74,527 in 201112. The numbers came down by more than 70 percent in two years to 21,129 in 2013-14.
Tata Motors has set up a facility at Sanand in Gujarat to make 250,000 Nanos a year."
So, the car sold nowhere near the numbers it was expected to. What did not help was that
when the car actually started hitting the market in 2010, some units caught fire. After all
the hoopla around the Nano, this wasn't what the public was ready to accept.
Brooks' sentence written for Edsel can be re-written for Nano as well: "After the Nano
was introduced, its pitfalls were the talk of the land." Further, the hype around the car was
so huge that the people were expecting something totally out of this world. They did not
know what they wanted, but they did not want what they got. The question that remains is
how much could you expect out of a car which was supposed to be sold at Rs 1 lakh?
17 | P a g e

Taking into consideration the views of all the other researchers, the researcher also
thinks that there was a problem with marketing and branding in the product. The product
undoubtedly was a brilliant make but the marketing team screwed it all.
An upper middle class family would not like to step in the foot of a class which explicitly
states itself as a poor mans car and this image cant even be blurred. Well TATA needs
good marketers I guess. But well done NANO MAKERS.
CHAPTER 3
Data Collection Methods:
18 | P a g e

For this research study, primary data was collected.
Primary Data has been collected through personal contact. For this purpose questionnaire
was considered with the owners of TATA NANO in the month of April, 2015.
The Instrument for data collection, in the form of a Structured Questionnaire, was
designed to elicit information on demographic and psychographic aspects of the
respondents. The demographic aspects included age, gender, education, occupation and
income. The psychographic variables included attitude towards TATA NANO and the
features they love. The questionnaire had a mix of open-ended and closed-ended
questions in it. The open-ended questions, which gave an added qualitative feel to the
instrument, provided the logic or rationale for the behavioural patterns and thus helped,
generate insights.
The sample of survey respondents comprised of teenagers and youths and old people in
the age groups 15-65 years across all Jaipur, Rajasthan. In all 50 respondents were chosen
on a random convenience-sampling basis.
About convenience-sampling: Convenience sampling is a type of non-probability
sampling technique. Non-probability sampling focuses on sampling techniques that are
based on the judgement of the researcher.
Convenience sampling is very easy to carry out with few rules governing how the sample
should be collected. The relative cost and time required to carry out a convenience
sample are small in comparison to probability sampling techniques. This enables you to
achieve the sample size you want in a relatively fast and inexpensive way.
CHAPTER 4
Data Analysis:
19 | P a g e

Quantitative methods using IBM SPSS statistics 20 were used to analyse the various
types of data collected through questionnaire.
Data analysis is as follows:
Data Analysis
1. On Age group of TATA NANO customers
TITLE: Age
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
18-30
20
40.0
40.0
40.0
31-40
10
20.0
20.0
60.0
41-50
11
22.0
22.0
82.0
18.0
18.0
100.0
50
100.0
100.0
50 and above
Total
It has been depicted in the Pie Chart that age group of 18-30 years is the
largest customer of Tata Nano contributing 40% of the total customers.
The age group of 31-40 contributes 20%, 41-50 contributes 22% and the age
group of 50 and above contributes the lowest i.e. 18%.
20 | P a g e
2. On Income group of TATA NANO customers

TITLE: Income
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
0-200000
20
40.0
40.0
40.0
200000-400000
24
48.0
48.0
88.0
12.0
12.0
100.0
50
100.0
100.0
400000 and above

Total
21 | P a g e
It has been depicted in the Bar Diagram that income group of Rs. 200000400000 is the largest customer of Tata Nano contributing 48% of the total
customers.
The income group of 0-200000 contributes 40%, and the income group of
400000 and above contributes the lowest i.e. 12%.
3. On Nano vs. Bike preference of TATA NANO customers
TITLE: NANOORBIKE
Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
Yes
33
66.0
66.0
66.0
No
17
34.0
34.0
100.0
Total
50
100.0
100.0
22 | P a g e
It has been depicted in the Area Diagram that 66% of the customers
preferred Nano instead of purchasing a bike.
And on the other hand 34% of the customers preferred not to go for Nano
taking bike as a substitute.
4. On which feature attracted TATA NANO customers to buy the same

23 | P a g e
TITLE: FEATUREATTRACTS
Frequency
Percent
Valid Percent
Cumulative
Percent
Price
Valid
21
42.0
42.0
42.0
Design
16.0
16.0
58.0
Mileage
11
22.0
22.0
80.0
All of the Above
10
20.0
20.0
100.0
Total
50
100.0
100.0
It has been depicted in the Histogram that PRICE attracts 21 out of 5o

customers being the most attractive feature.
24 | P a g e

DESIGN attracts 8, mileage attracts 11, 10 say all of the above and interior
space attracts none out of 50 being the lowest out of 50.
5. On how many customers agree that TATA NANO is cheap, economical,

affordable and compact car as compared to other cars in small car segment
TITLE: NANOQUALITIES
Frequency
Percent
Valid Percent
Cumulative
Percent
25 | P a g e

Highly Agree
Valid
18.0
18.0
18.0
Agree
19
38.0
38.0
56.0
Neutral
16.0
16.0
72.0
10
20.0
20.0
92.0
8.0
8.0
100.0
50
100.0
100.0
Disagree
Higly DisAgree
Total
It has been depicted in the pie chart that 38% customers agree with the fact
that TATA NANO is cheap, economical, affordable and compact car as
compared to other cars in small car segment.
However 20% disagree, 18% highly agree, 16% are neutral and 8% highly
disagree upon the fact.
6. On how many customers agree that TATA NANO is peoples car
TITLE: Peoples Car

Frequency
Percent
Valid Percent
Cumulative
Percent
Valid
yes
32
64.0
64.0
64.0
26 | P a g e

no
18
36.0
36.0
Total
50
100.0
100.0
100.0
It has been depicted in the line graph that 64% customers agree that NANO
IS PEOPLES CAR.
On the other hand 36% of the customers think that NANO IS NOT
PEOPLES CAR.
CHI SQUARE
1. On comparing gender group of the customers and usage as taxi of TATA
NANO
Gender * Taxi Cross tabulation

Count
Taxi
Embarrass
Gender
Total
Don't Care
Male
14
12
26
Female
16
24
30
20
50
Total
Chi-Square Tests
Value
df
Asymp. Sig. (2-
Exact Sig. (2-
Exact Sig. (1-
sided)
sided)
sided)
Pearson Chi-Square
.855a
.355
Continuity Correction
.404
.525
Likelihood Ratio
.859
.354
Fisher's Exact Test

Linear-by-Linear Association
N of Valid Cases
.399
.838
.263
.360
50
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 9.60.
b. Computed only for a 2x2 table
Hypothesis (H0): There is no relation between gender and usage as taxi.

27 | P a g e

Hypothesis (H1): There is relation between gender and usage as taxi.
Since the significance value of Chi Square is more than .05, we accept the
hypothesis. That means that there is relation between gender and usage as taxi.
Females tend to feel more embarrass when NANO is used as taxi as compared
to males.
2. On comparing gender and will the customers recommend TATA NANO to

their family and relatives
Gender * Recommend Family Cross tabulation
Count
Recommend Family
Yes
Gender
Total
no
Male
17
26
Female
19
24
14
36
50
Total
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
df
Asymp. Sig. (2-
Exact Sig. (2-
Exact Sig. (1-
sided)
sided)
sided)
1.176a
.278
.592
.442
1.190
.275
Fisher's Exact Test

N of Valid Cases
.352
1.152
.222
.283
50
Hypothesis (H0): There is no relation between gender and recommendation of

Nano.
Hypothesis (H1): There is relation between gender and recommendation of
Nano.
28 | P a g e

hypothesis. That means that there is relation between gender and
recommendation of Nano. Males tend to recommend TATA NANO more to
their family and relatives as compared to females.
3. On comparing occupation and tendency to purchase after the price hike of

TATA NANO
Occupation * Recommend Crosstabulation

Count
Recommend
yes
Occupation
Total
no
Student
13
16
Professional
20
14
34
33
17
50
Total
Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
df
Asymp. Sig. (2-
Exact Sig. (2-
Exact Sig. (1-
sided)
sided)
sided)
2.439a
.118
1.542
.214
2.591
.107
Fisher's Exact Test

N of Valid Cases
.200
2.390
.106
.122
50
Hypothesis (H0): There is no relation between occupation and tendency to

purchase after hike in price of NANO.
Hypothesis (H1): There is relation between age occupation and tendency to
purchase after hike in price of NANO.
29 | P a g e
hypothesis. That means that there is relation between occupation and tendency
to purchase after hike in price of NANO.
It means that students will decrease their purchase of NANO if the price of
Nano rises as compared to professionals.
CHAPTER 5
CONCLUSION
The Tata Nano's launch failed by nearly every measure. Sales fell far short of
forecasts. The relocation of the factory was a debacle. One need not invent a colorful
metaphor to describe the situation: occasionally, the car even burst into very real
flames.
30 | P a g e
"The People's Car" also known as the world's cheapest car, cost a mere 100,000
rupees - about $2,000. Achieving this price point represents a feat of frugal
engineering. Yet as others have noted: no one aspires to own the cheapest car
in the world.
Sure, consumers love bargains. But vehicle choice makes a statement about the
buyer, something well documented in JD Power's research on why people buy
Toyota's Prius. It's not about gas mileage; it's about image. The image consumer
segments from A to E want to project has nothing to do with being the cheapest in
the world. As the editor of Auto Car India points out, Tata added insult to injury
in that the top-end Nano model was priced at about 200,000 rupees (two lakh)
while still being perceived as a one lakh value.
There was the problem of positioning. The car was obviously to be targeted to
families that travelled on two-wheelers at great discomfort and risk. But instead of
using marketing channels to reach their target audience, Tata used social
media and other non-conventional methods of marketing, probably due to
31 | P a g e

margin issues. The sales reflected this. Half of the Nanos purchased were
second cars, clearly violating the positioning which sought to transition
people from two wheelers to four wheelers. The lack of communication to the
appropriate customer segment led to the downfall.
Tata missed the mark by a wide margin on many accounts. Yet despite these errors
the Nano has accomplished some big tasks. There is now a race to build a better
"world's cheapest car." Thousands of articles, blog posts, books, and commentaries
have been written about why the Nano went wrong and how to avoid the same
mistakes. Tata appears to have taken good notes. The company is coming back
with what appears to be a better version. By persevering and maintaining a
focus on the base of the pyramid, the company demonstrates the enviable
capacity for leadership and foresight. Yet perhaps most importantly, the Nano
presents other companies and development organizations some clear lessons from
which to learn.
Despite the setbacks, this is clearly a journey that Tata has embraced. If the Nano
doesn't have you convinced, check out the Swach filter or $700 home able to be
assembled in a week both produced by Tata. The company, whose roots to the
base of the pyramid are the strongest around, has planted its sword in the
ground. That's an admirable stance that shows clear leadership from a
company that is not afraid to show its commitment to what was once deemed
impossible, unwise, and unprofitable.
Tata is blazing a path forward, learning from failures as it goes, and showing the
rest of the world how to get things done in the process. Tata may not have gotten
it right just yet but the company's efforts -especially for the Nano - are
teaching those of us focused on increasing access in base of the pyramid
markets volumes. The next time the topic comes up and your company,
friends, or favorite blog laments the failure of the Nano project, give a little
thanks to Ratan Tata himself for being a courageous leader and helping to
start a conversation that will continue to move this field forward.
In the eyes of the researcher the product was far from Excellency and it was what gave
other competitors, nightmares. But just because of faulty marketing the sales went down.
32 | P a g e

Its a lesson for them. But well they say KEEP ON AND KEEPING ON! Cheers!
33 | P a g e
CHAPTER 6
Bibliography
Philip Kotler: Marketing Management
34 | P a g e
CHAPTER 7
ANNEXURE
QUESTIONNAIRE ON TATA NANO A RESEARCH ON ITS FAILURE
PERSONAL DETAILS- Please put a tick mark on the option you find most suitable.
A. AGE
1. 18-30
2. 31-40
3. 41-50
4. 50 and above
B. GENDER
1. Male
2 .Female
C. OCCUPATION
1. Student
2. Professional
D. INCOME (in Rs)
1. 0-200000 (in Rs)
2. 200001-400000 (in Rs)
3. 400001 and above (in Rs)
OTHER DETAILS- Please put a tick mark on the option you find most suitable.
A. Did you prefer to go for the NANO instead of a bike?
1. Yes
2. No
B. Do you agree that TATA NANO is cheap, economical, affordable and compact car as compared to
other cars in small car segment?
1. HIGHLY AGREE
35 | P a g e

2. AGREE
3. NEUTRAL
4. DISAGREE
5. HIGHLY DISAGREE
C. Which feature of NANO attracts you the most that inspired you to go for NANO?
1. Price
2. Design
3. Mileage
4. Interior space
5. All the above
D. Which colour of NANO did you prefer?
1. Red
2. Blue
3. White
4. Yellow
5. Silver
E. For what purpose do you mainly use NANO?
1. Offer it to your children to use it in place of a two wheeler.
2. Used as family car for shopping and travel.
3. As a taxi.
4. Offer as gift.
F. Do you think NANO is people's car?
1. Yes
2. No
G. Will you recommend NANO to your friends and relatives?
1. Yes
2. No
H. If the price of NANO rises, would you still RECOMMEND purchasing it?
1. Yes
2. No
I. Will Tata be able to maintain the price of Nano in future if there is hike in cost of raw
materials?
1. Yes
2. No
J. How will you feel if NANO is used as a taxi?
1. Embarrass
2. Dont care
K. Is there a traffic problem with the introduction of Nano on Indian roads?
36 | P a g e

1. Yes
2. No
L. Can you trust NANO for safety?
1. Yes
2. No
Dear Sir/Maam, Thank you so much for your valuable time. I am so very grateful to you.
37 | P a g e

Failure of Tata Nano

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Failure of Tata Nano

Uploaded by

Copyright:

Available Formats

The Failure Story Of Tata-Nano

TAMIL NADU NATIONAL LAW

THE FAILURE STORY OF NANO

SUBMITTED IN THE PARTIAL FULFILLMENT OF B.COM. L.L.B (Hons.), SECOND SEMESTER

Submitted to: PROF. P. Murugesan

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

Karan Kumar Khetani

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

economical, affordable and compact car as compared to other

NANO to their family and relatives

price hike of TATA NANO

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

What Influences CONSUMER BEHAVIOUR

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The five-stage consumer buying process consists of problem recognition, information

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

2. On Income group of TATA NANO customers

400000 and above

The Failure Story Of Tata-Nano

The Failure Story Of Tata-Nano

4. On which feature attracted TATA NANO customers to buy the same

The Failure Story Of Tata-Nano

All of the Above

It has been depicted in the Histogram that PRICE attracts 21 out of 5o

The Failure Story Of Tata-Nano

5. On how many customers agree that TATA NANO is cheap, economical,

The Failure Story Of Tata-Nano

TITLE: Peoples Car

The Failure Story Of Tata-Nano

Gender * Taxi Cross tabulation

Asymp. Sig. (2-

Exact Sig. (2-

Exact Sig. (1-

Fisher's Exact Test

Hypothesis (H0): There is no relation between gender and usage as taxi.

The Failure Story Of Tata-Nano

2. On comparing gender and will the customers recommend TATA NANO to

Asymp. Sig. (2-

Exact Sig. (2-

Exact Sig. (1-

Fisher's Exact Test

Hypothesis (H0): There is no relation between gender and recommendation of

The Failure Story Of Tata-Nano

3. On comparing occupation and tendency to purchase after the price hike of

Occupation * Recommend Crosstabulation

Asymp. Sig. (2-

Exact Sig. (2-

Exact Sig. (1-