PRICING STRATEGIES

for the peoples car

m
a
e
T

Presented by:

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z
Bra

Dr. Amrita Singh

Alok Kumar
Ajay Singh
Anushree Pandit
Gaganbir Kaur
Jatin Saxena
Jyoti
Ishrat Batool

Development of a One
lakh Car

WHAT MAKES IT SO CHEAP!

The TATA Nano uses plastics and
adhesives rather than welding.
Partially using inexpensive polymers
or biodegradable plastics instead of a
full metal body.
It has no AC, no power steering, no
power windows.

Target Market

Why should People Buy

Nano..
Low price and covers basic needs of
a car.
Its look cute and attractive
Better facilities for servicing and
maintenance
Easy finance

But was It REALLY a 1 LAKH

Rupees Car?

Why the price hike?

Tata said that
expensive lending rates,
higher fuel costs, and inflation
hit margins during the last
year is forcing us to pass on
the costs to its customers.

Increasing input costs, especially that of steel and other commodities like
rubber, had put pressure on margins.

TATA PRICING
OBJECTIVES

Survival
Maximizing market share
Keeping the price range near 1 lakh
Discouraging potential competition

TATAS PRICING STRATEGY

Though the one lack tag was not fixed by TATA
group, it was the word of mouth of people which
fixed the range. This expectation of people
creates a big challenge for the company. To
accept this challenge the following strategies are
followed:
Increasing market share
Penetration pricing
Low pricing policy with minimum profit margin

PRICE OF VARIOUS CARS

AVAILABLE FINANCING SCHEMES

Tata Motors Finance (TMF) will provide finance
up to 90% for the Nano at easy rates.
the company has announced a four-year or
60,000 kilometer manufacturing warranty at
no extra cost.
Loan within 48 hours

comprehensive maintenance contract atRs.99

per month for all new customers.

Proposed pricing objectives

Survival
New market penetration
Increase the perceived value of Nano
Increase market share

PROPOSED PRICING STRATEGIES

Penetration pricing
Target costing
Low pricing policy with minimum profit margin
which is only 2%
Perceived value pricing
Increased market growth
Discouraged potential competition

Selecting the final

pricing
Influence of other marketing mix

Cash discount

Price List
ex showroom prices
Model
Nano BS IV
Nano CX BS IV
Nano LX BS IV

Price
Rs 145,000
Rs 170,078
Rs 196,956

Banks

PROJECTED NEW COST

%
allocated
Manufacturin
g cost
place
promotion
tax
misc.
profit

sales

2010

2011

145,000

153,000

40

58000

61200

20

29000

30600

30

43500

45900

7250

7650

4350

4590

20

2900

3060

60,000

69000

RECOMMENDATIONS

Through government subsidies and tax

Collaboration for loans with Gramin
banks and post offices

 Cost effectiveness Spare parts

packages
Nano Special Outlets(NSO) discount
Decreasing down payment in rural
areas

Thank You