MAJOR PROJECT- Unschool

Repositioning the Tata Nano

Q1. Was the Tata Nano’s initial positioning as an upgrade for two-wheeler
owners a good choice? Defend your answer.
Yes, I feel Tata Nano’s initial positioning as an upgrade for two-wheeler owners was a good
choice as it had been noticed that Indian families with three or four family members often
commuted on a two-wheel scooter or motorbike. It was a dangerous mode of transport,
especially for night driving and adverse weather conditions. Tata Nano’s motive was to make a
safe travelling mode of transport for the Indian masses, a four-wheel vehicle made from scooter
parts.

Indians for whom this product is directed to are highly cost conscious and very demanding. It is
not only the retail price of a car that is important to them but also to factors like fuel efficiency
and running costs while making their purchase decisions. They want added safety and luxury,
but they want it practically at the same cost. The emergence of a large middle class, estimated at
about 300 million, together with a young population with big aspirations, presented is the most
ideal customer base for Nano.

Q2. Should Carl-Peter Forster change the marketing programs (marketing

mix) for Tata Nano in December 2010? If so, what specific changes would
you recommend? Why?
Carl peter Forster should change the marketing strategy for Tata Nano because as we know their
strategy was based on cost: they intended to create a new market (ULC) ultra-low cost based on
this only factor, and the Nano was very limited on the rest of factors: like we said it had an engine
with little power.

Customer perception could have had been that if Nano was so cheap, it might be of bad quality, as
generally happens with cheap products (the price-quality relationship). If its competitors could
come up with s product with better quality at a lower price, customers would probably prefer the
alternative.

To this we could add the fact that they had unforeseen problems at the beginning with
production targets, and they had to move their factory, which delayed their production &
distribution even more, giving the competitors time to react.

Q3. Tata is planning a launch of TATA Nano for Europe 2020. Can you
briefly recommend:
 Positioning
 Product adaptation
 Pricing strategy
 Distribution channel planning
 Promotion strategy and brief advertising campaign (communication
channels and message)
It is necessary to analyse the environment of Tata Nano in order to internationalize and to
expose the product in other countries, especially in the Europe, which is, targeted the most.

Firstly, for the positioning of the product, Tata needs to analyse the positioning of other cars
in the European market because that will help the company to choose the right position of its
product. Tata needs to create a competitive pressure which means what their key element is,
i.e., low cost that’s when customers will prefer the Tata Nano rather than other cars because
as we know the European market of automobile sector is growing with a lot of things like
product advertising and channels of distribution.

Adding to that concerning target customers, Tata should target women as the design of the
car looks quite feminist. Therefore, if this brand of car intends to go to Europe the marketing
of its product needs to be more attractive to the most interested customers (especially
women).

Secondly, concerning the product adaptation, we need to understand we are operating in a

kind of market that is educated. The company needs to modify the product to make the car
legally acceptable in the market because the company should follow the requirements of
environmental law with a marketing term of eco-friendly and safety in Europe. That’s the
first change the company should make.

In addition to that fuel efficiency should also be taken into consideration by the company.
Tata needs to manage the increase the fuel efficiency of the Nano, which would also reduce
costs for the consumers.

Thirdly, about pricing strategy, Tata Nano’s management used penetration pricing, since
their objective was market development by encouraging those people to use cars, who were
previously unable to buy cars because of high prices. But if the prices are kept so low
customers could perceive the product to be of a low quality, as it generally happens with
low priced goods (price-quality relationship). Although the Nano had the key element as
“World’s Cheapest Car” people might refrain from buying, therefore it should increase the
cost a bit and even add a few better attributes to it.

Fourth, about distribution channel planning for Nano in Europe, the marketers can import
the ‘easy- to- assemble’ kits from their home country and then the products should be
assembled at certain locations. After that, the company could redistribute the finished cars
to the various showrooms throughout the country.

Lastly, about promotion strategy and brief advertising campaign, we should choose the
communication channels that are designed to link with their selected target clients at times
when they will be more able to receive these messages to sell the product. These messages
are used by the audience to compare the product and show how it is different than other
competitive offering cars, as well as to unveil the value-added of the purchasing. The
products could be promoted through communication via TV ads at sporting events and social
networks, the advertising depends on the target costumers and the culture of the host
country as well.
Name- Sayanee Mitra
Email- mitrasayanee@gmail.com