MARKETING POSITIONING the SYED MARIJ HUSSAIN

MANAGEMENT TATA NANO 16705

Looking at the potential of the growing domestic market for cars and with the prospect of
introducing a low-cost and fuel-efficient car, Tata Motors Ltd. introduced Nano, a low-cost
‘people’s car’ for the middle class consumers of India, starting from 1 lac for the basic Nano
Model. Now the problem is, who to target for this car, the customer looking for the cheapest
available car or a specific segment like college students who might be influenced by Nano’s style
and manoeuvrability.
Tata came up with the number on a whim but a few problems arose with such a small price point.
Reliant on more than 100 suppliers, while focusing on the engine itself, Tata wanted to prioritise
the cost while maintaining quality, however, the engine in the back increased the noise level for
the passengers. Moreover, the basic Nano model, the 1 lac one, hardly had any of the amenities
one would expect from a comfortable car. For extra options, customers would have to pay more,
hence deviating from the concept Tata started with. The issue with Singur plant, along with the
substantial financial loss Tata suffered and the temporary use of Patnagar plant, restricted the
number of cars that could be manufactured and Tata had to introduce the booking system,
possibly the lottery one as well, if the orders exceeded the production demand. On the customer’s
front, Maruti 800 was the only car serving the mini market before Nano and was classed as the
car for the masses but other competitors had already issued their statements about entering the
markets with their own ULC cars. This would prove a tough competition even if they were more
expensive than Nano. Two wheeler was the bigger competition as they were far less expensive,
fuel-efficient and required low maintenance. For the crowded urban cities, it gave the drivers the
ability to travel faster and without lags. Critics also criticised that introducing more passenger
cars would further heighten the traffic congestion problems and ultimately lead to air pollution
that goes against the Tata’s green initiative.
Tata should focus on the college students to grab the market share in the mini sector and achieve
competitive advantage. The young adult population in India is increasing at an exponential rate
and would be a great sector to target. Furthermore, Tata should market its brand more
aggressively and try to control the narrative. Instead of Nano just being the cheapest model
available, they should highlight its other aspects that would be viable for the college students.
Furthermore, they should give intensive training to engineers who assemble cars in independent
groups in rural areas and design a proper task force team for quality checks at different stages so
that quality of their cars, even if not assembled by themselves, is maintained.