Marketing Plan for Tata Nano

15 May 2014
XLRI, JAMSHEDPUR

TEAM MEMBERS (# 9)
ABU ASIF HASAN
AJIT SINHA
AKASH PRIYRANJAN
ASHUTOSH TRIPATHI
GYANESH DUBEY
SUMANTRA KAHAN

MP13001
MP13003
MP13004
MP13017
MP13026
MP13060

Marketing Plan - Nano`

XLRI- JAMSHEDPUR

Acknowledgement

The Project on Marketing plan for Nano is the glimpse of the gamut of
marketing activities proposed for Tata Nano. This project has helped all group
members to correlate all marketing concept under one umbrella. The project
has enabled us to use all marketing I and II concepts in a practical aspect.
We sincerely thank Prof. Narasimhan Raj Kumar for acting as a torch bearer
for guiding us in completing the project. Our group gained valuable inputs in
our focused interaction with Professor.
Our group would like to express gratitude towards our organizations for
providing us the relevant data as required for completion of the project.
We would like to express our special gratitude and thanks to Mr.Ashok Jaiswal
for giving some unsought data.

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Index.

SL
No

Description

Page No

Product

Core Strategy

About the Company

SWOT Analysis

Porters 5 forces

Segmentation based on Demographics

10

Perpetual Mapping

12

STP Analysis

13

Marketing Mix

14

10

Financial Lookup

18

11

Contingency Plan

19

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Product
Tata Nano is a vehicle intended to provide safe and affordable transport
to families. The targeted group consists of families who are unable to
afford the existing entry level car model and therefore are two wheeler
owners but feel unsafe and uncomfortable when travelling as a family
in inclement weather .They therefore want a four wheeler with weather
protection but with a cost of ownership comparable with owning a
couple of two wheelers .
Cars and two wheelers are Specialty goods. Customers spend a long time
in making the decision and are willing to pay more and wait to get product
of their choice. The products satisfy the esteem level need. For such
products purchase decision is based on price only if the customer is
convinced that other features of competing products are comparable.
Nano was created to satisfy a security level need. Thus it became a
product requiring a high customer involvement for purchase but meeting
a basic need [ safety ] .
Market size:
Passenger car sales in 2012-13 1.89 million.
Categories: Hatchback, Sedan, SUV
Sub category: Minicar < 800 cc
The mini car segment is 21% of the total car market.
Nano is a hatch back mini car.
Competitors:
Maruti 800 and Maruti Alto 800 are the only competitors in the mini car
category .
Maruti 800 being a four seat car is a close competitor. It has inferior features
but a higher price. For this reason it was withdrawn from the market and is
no longer available.
Maruti Alto 800 is a five seat car. Maruti has reduced its price. So it is
perceived as a better value for money .It has the largest market share of
all .Annual sales of Nano is < 10 % of Alto.
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Parameters

Maruti 800

Tata Nano

Engine

800 cc

623 cc

Length

3.335 m

3.1 m

Width

1.440 m

1.5 m

Height

1.405 m

1.6 m

120 km/hr

90 km/hr

2.25 Lakh (on road)

1.26 lakh (on road)

Top speed
Cost
Environment:

Indian auto industry is worlds sixth largest. Although it grew rapidly at

present it is experiencing negative growth. A large number of established
manufacturers have set up manufacturing facilities in India. India is emerging
as a leading manufacturer of small cars as global majors turn their Indian
facilities into global hub for small cars.
Strategy Products
Customer targets: Earlier Tata Nano was targeted towards the owner of a
two-wheeler .It was conceived to give the people who rode on two-wheelers
an all-weather, safe, affordable transport for the whole family. It was
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positioned as peoples car with target market as the customer who has
income of 1 lac annually .With the slow response the car has now been
repositioned into new smart city car through its new ad called horizon next
for attracting & targeting the young city dwellers.

Competitor Targets: The closest competitor of the "Nano is Maruti 800 a

small car from Maruti Suzuki, which is more expensive than Tata Nano. Even
though it is shorter [6 %], Tata Nano being taller and wider has more interior
space [21%] than the Maruti 800. Maruti Suzuki being aware of the gap
withdrew Maruti 800 from the market and reduced the price of Alto for the
competing with Tata Nano. Alto is also a small car but it is a five seat car
with greater luggage space and other superior features. Alto is the highest
selling car in India and has competed very success fully with Nano.
Bajaj auto was the only other manufacturer who was developing a low cost
car (code-named ULC) tagged at 2,000 Euro together with Renault-Nissan to
rival Tata Nano. This ultra-low cost car project has now been cancelled. Bajaj
has continued the development of a low cost vehicle. However it is not a car
any more but a quadricycle and it is targeted towards the commercial sector.

Maintenance services
The Tata Motors offers customers of Nano maintenance services at a fixed
price per month. The services are extremely competitive and cheap as the
car itself.
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Bank Services
Tata Nano has signed contracts with Indian Banks in order to allow low
income people to get
Loans at low interests so that they can book their Tata Nano.

Core Strategy:
Buyers
The core strategy is to attract the customers who have just arrived at the
scene and need all features at least price. They are attracting the young
middle class professionals who dont have a car .Basically they are filling the
position between the two wheelers & Sedan segments by offering the value
of a car at the price of a good bike.
New entrants
This creates an innovative product for a new segment with a high entry
barrier because existing models cannot be re -engineered for this segment.
Any competing product must be designed from scratch which requires large
investment, skills and time.
Suppliers:
An independent supply chain was created for Nano. Vendors were developed
for supplying components specially developed for Nano such as 12 wheel
rims. Success of Nano was dependent upon the vendors who supplied key
components. To ensure proper control many of the vendors were located
within factory premises of Nano plant.
Substitutes:
Nano being a unique product did not have a substitute which offered the
same combination of price, safety, comfort and utility. However two wheelers
and public transport satisfy some of the wants which are satisfied by Nano

About Tata Motors Limited.

Tata Motors Limited is India's largest automobile company, with consolidated
revenues of INR 1, 88,818 cores (USD 34.7 billion) in 2012-13. It is the leader
in commercial vehicles in each segment, and among the top in passenger
vehicles with winning products in the compact, mid-size car and utility

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vehicle segments. It is also the world's fifth largest truck manufacturer and
fourth largest bus manufacturer.
Established in 1945, Tata Motors' presence cuts across the length and
breadth of India. Over 8 million Tata vehicles ply on Indian roads, since the
first rolled out in 1954. The company's manufacturing base in India is spread
across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar
Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad
(Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an
industrial joint venture with Fiat Group Automobiles at Ranjangaon
(Maharashtra) to produce both Fiat and Tata cars and Fiat power trains. The
company's dealership, sales, services and spare parts network comprises
over 6,600 touch points.

Product Mix

SWOT Analysis:
Strengths:1) Tata Motors is the largest truck manufacturer and the second largest
passenger vehicle manufacturer of India and 5th largest truck manufacturer
in the world.

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2) Tata Motors is at Fourth position in the domestic passenger car market.

3) Wide range of product portfolio.
4) TATA BRAND Household Name.
5) The two acquired brands Jaguar and Land rover also has a history of
excellent reputation in the respective segments.
6) The company also has world class quality accreditations including ISO
9001, ISO 14001 and ISO 20000, excellent supply chain management using
the SAP framework.
7) It also has a good global presence with its joint ventures and associations.
8) Financially also the company is in a very strong position.

Weaknesses:1) Slackness in expansion of overseas market.

2) Tata Motors competitors have expanded into overseas markets, while the
progress made by Tata Motors is slow and is in recent past.
3) Tata Motors is mainly dependent on the Indian market.
4) Tata Motors is thought to be an Indianised brand.
Opportunities:1) The company believes that the car market is good in developing India.
2) In India car penetration is only 7 per 1000 population.
3) There is an expectation of increasing market for small cars with the
enhanced urbanization and expansion projects.
4) Tata Motors and leverage the brand name of JLR in terms of technological
excellence.
5) New product line with increased fuel efficiency.

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Threats:1) Decreasing market share in car market in India.

2) Fierce competition in small car segment from Hyundai, Maruti, Chevrolet
etc.
3) Foray of global players in to the India market of small cars and other
segments.

Porters 5 forces:

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SEGMENTATION ON THE BASIS OF DEMOGRAPHICS.

The Segmentation is done by personifying the each segment available in the
Indian Car Market.
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Each Segment has been personified as the one individual representing the
complete target Segment.

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The Identified Segment is of Rocky, HiraLal, and Ankur Anand.

The Perceptual mapping for the targeted segment.

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Segment

Rocky

Positioning
and value
proposition

Quality , Best in class

styling , Power , Music

Marketing
Strategy
. Product
. Price
. Place
. Promotion
. Physical
Evidence
. Customer
Service
. People

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Nano Xing , Variants

with All features as
per his perceptual
mapping
Price : Less than 2.5
Lakh
Online Shopping,
Direct Buying
TV Commercials
promoting the
association of College
students with Fun ,
Hangout and
Enjoyment

Hira Lal

Ankur Anand
Styling , Music
Space , Price , Fuel
System , Power
Economy, Service ,
styling ,Space ,
Reliability
Quality
Nano LX, Variants
Nano Vx, Variants
with All features as
with All features as
per his perceptual
per his perceptual
mapping
mapping
Price: Less than 2.5
Price: Less than 2.5
Lakh
Lakh
Personal
Online Shopping,
Selling,Direct Buying
Direct Buying
TV commercial
TV Commercials
showing features and
promoting the
value proposition
association of Couple
over competitions ,
having fun in rain.
Promotion though
Inside car enjoying
Street displays, Free
the togetherness in
Drive.
Car

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Marketing Focus STP Analysis

In order to analyze the strategies for the launch of Tata Nano, it is imperative
to understand the segments and target customers that Tata Nano caters to.
Also, the positioning is a key element in deciding the Marketing and
Distribution strategies.
The target customers for Tata Nano are lower and middle income families,
who aspire to upgrade to 4- wheelers from being 2-wheeler users. Many of
such families stay away from purchasing 4- wheelers primarily due to the
affordability factor. Affordable purchase price, low maintenance cost,
increased safety, usefulness as a family vehicle are the factors that influence
such buying decisions.
The second set of customers Nano is targeting is the youth, especially
students who prefer young, trendy and innovative vehicles. 4-wheelers with
their inherent safety characteristics would appeal more to them over 2wheelers. Again cost would be the differentiating factor for Nano over other
4-wheelers.
Similarly, Nano also targets the families who want a second car, mostly for
women and children. Nano has been positioned as an innovative and trendy
car, as opposed to a cheap product. Emphasis has been done on the quality
standards, safety features, environment friendliness and innovative design. It
leverages the TATAs trust and care for the people throughout its positioning
and publicity.

Product Strategy
The Tata Nano CX, including all the features described in the earlier Product
Review section, would be sold with a three-year warranty or 100,000km
warranty, whichever comes first. Tata will introduce the Tata Nano LX during
the following year, after they have established the Tata brand. The brand and
logo will be displayed on the car as well as in all marketing campaigns.
Variants and their Pricing:
Basic STD priced at 123,000 INR as no extras;
Deluxe Cx at 151,000 Rupees has air conditioning;
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Luxury Lx at 172,000 Rupees has air conditioning and power windows

Price
Pricing for the Nano took two forms: price penetration and low cost in order
to be highly competitive in the market.
Penetration Pricing: Tata recognized that they were entering a competitive
market with established brands. To gain market share they would enter with
prices far below competitors.
Low Cost. Tata would offer a product similar to its competitors at a lower
price. The cost of production was to be kept significantly low. TNM is also
confident that production and distribution costs will fall as sales volume
increases and the low price of Nano cars will help to keep out competition
and maintain its low-price position.

Place and Distribution

Tata planned to reinvent the conventional auto industry distribution model
build Trial & Order centre. Purpose of these centres was to be for
consumers to test drive and place an order for a Nano. These store fronts
would be simple, small and numerous.
Inventory units would be for customers who cannot wait for the
manufacturing delay.
Customers would have the choice of model and color. An order will be
placed and manufacturing will begin.
Manufacturing delay would be minimal as car is very simple. The cars
would be shipped to the centers, and staff delivers the car to the customer.
Cost of labor in India is low, so staffing these centers is inexpensive. Trial &
Order centre are located in close proximity to banks so that financing is
available within walking distance. One in five of these centers are designed
for after sales service.
Minimize Channel length, preventing price escalation and preserving its
competitive advantage = high level of control over how the brand is
managed and product is marketed.
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Positioning
Tata Nano will position itself as the world cheapest car and yet does not
compromise the quality, safety and environment. But its not Enough Nano
has now positioned itself as Easy to drive vehicle in Massive traffic jams
because of its low turning radius.
To summaries the Positioning Nano has been positioned as :
1. Value for Money Car.
2. Easy to drive Car into Heavy city traffic
3. Best in class Styling and Build Quality.
This positioning will be achieved by leveraging Tata Nanos competitive edge:
industries experience from the parent company Tata Motor who has been in
vehicles industries (commercial, passengers & utilities) since 1945. Tata
motor has good supplier manufacturer relationship with more than 100
components.

Promotion
The Tata people have done some commendable job with regards to the
online promotion of the car and have gone beyond the traditional methods of
advertising and promotion online.
The Nanos overall marketing strategy will use conventional media in an
unconventional manner. Unlike most small cars, Nano wont be big on
advertising. There will be no TV campaign, only innovative use of print, radio
and other media, particularly the web. The Tata team is working on Nano
news in papers, Nano breaks on radio, Nano appearing in the form of
messages or ticker news on TV, online Nano games, Nano chat rooms on the
Net, Nano pop-ups on major websites and Nano conversation on Face book,
and blog spaces Tatanano.com

The Promotional activity can be done to attract the various segments as such
deciding for Advertisement. We need to design advertisement specifically
catering to specific target group. As such for Rocky a facebook page will be a
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good option as a college student he would like to attach himself with social
networking site. It will make it post and share the Nano updates.

The Promotional Activity would be:

The TV Ad should be such that he can associate himself with Nano as a part
of his daily routing, He should be able to hangout with friends and the Ad
must focus on the enjoyment part , Such driving , Air conditioner etc.

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The Promotional Activity would be:

Hira Lal would be more concern about the fuel economy, Space and Price.
For him Nano is defiantly .
For him AD should focus on the Happiness, when the Car comes to a middle
class family

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The Promotional Activity would be:

Ankur Anand would be more concern about the riding comfort, Space and
Price. For him Nano has to be place where can hear the voice of her wife
singing, Who never use to sing in home because of the busy schedule.

Financials
Population of India(In
Millions)
Income Groups
Segment
% of Population
Average Annual Income(Rs.)

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1000
Deprived
N/A

Aspirers

Seekers

Rocky

HiraLal

Strivers
Ankur Jain

54%

41%

4%

1%

90000

200000

350000

750000

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No. of Households(In
Millions)
One Nano per household(In
Millions)
Expected Ownership(27% )
Nano Models
Price
Margin per Nano(Rs.)

108

82

108

82

22

STD

LX

Twist

153000

219000

241000

15300

21900

24100

Cost of Marketing(Rs.
Millions)
Segment Profit(Rs. Millions)

370

40

10

338372

47264

13004

Segment Attractiveness

Maximum

Average

Minimum

Segment Profit:
By analyzing the Pie Chart, We find that Rockys segment is most profitable
segment. The segment shows the net revenue of 338372 Million with total
85% of total market share.

Contingency Plan
1) To reduce price of car by improving manufacturing processes, low price
material selection and R&D in order to cope up with price raise of fuel,
manufacturing cost and government regulations and tax rates.
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2) Extensive marketing activity to create excitement of the product and

brand to increase its market share, increase selling and compete with rivals.
3) Be alert about competitors and their move.
4) Plans for changing economic and political conditions.
5) Plans for new model delay and recall of vehicles.
6) Financial backup for worst situation.
7) New model delay and recall of vehicles.

References:

Gyan Research and Analytics Pvt. Ltd.

Tata Motors Website.
Tata Nano Facebook.
Maruti Suzuki Website.

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