IntroductionTheworldwide auto industry is in between of dramatic growth and change. TataMotors is a sector of the USD 100 billion Tata group which was founded byJamsetji Tata in 1868 in India. Tata Motors main aim is to focus onsustainability and giving its customers the best. Tata manufactures cars thatgive the best comfort, connectivity and performance.
Tata’s design, researchand development (R) centres are located in India, the UK, Italy andKorea. Tata which is globally spread is also famous for its mission statementwhich is “to be passionate in anticipating and providing the best vehicles andexperiences that excite our customers globally’. Tata companies are part ofmany community development and environment projects. Tata group focuses onsocial activities which are health, primary education, skill training,entrepreneurship, livelihoods, women empowerment and strengthening services.
In2008 Ford was facing a high rate of bankruptcy and that is when Ratan Tataoffered them to buy their car brand Jaguar-Land Rover. The deal was made for2.3 billion US $ which was 9300 crores in Indian Rupees at that time of theyear. Basically, Tata offered this deal because once when Tata was in need ofhelp they were insulted instead of helped and this lead for a revenge fromTata’s side. Tata Motors is India’s largest automobile company. Tata which is avery well-known brand worldwide launched a new car called Tata Nano which wasknown as ‘people’s car’. In 2008 Ratan Tata the chairman of Tata Motorsannounced the launch of its new car Tata Nano which later on became famous as ‘people’scar’. He called it a 1 Lakh Rupee Car, since it was the best anyone could getat this price.
Tata Nano was a customer-desired car it was made with theunderstandings of what the customers needs are. There was a story behind thelaunch of Tata Nano which made Ratan Tata launch the car. One day Ratan Tatasaw a family of four on a two-wheeler, the family also had little kids and theywere struggling to fit themselves properly. Moreover, after this incident RatanTata thought of providing everyone with a secured and affordabletransportation. Firstly, Nano’s price was kept very low with a spaciousinterior, lower weight of the car, and installing the engine in the front alsohaving the petrol tank in the front.
Secondly, Nano had more of fiber andplastic instead of steel to keep the weight of the car low which also made it alow-cost car. Lastly, Nano has no radio, power windows, air conditioner,anti-lock brakes, air bags, remote lock or power steering. HowTata Nano is built and managed over time Abrand pyramid is a diagram that almost every organization creates which gives abroader view of an organization. The brand pyramid mostly has 5 bars, and isread from bottom to top. Tata Nano also has its brand pyramid with 5 bars, theyhave classified them as 1) Market, 2) Target Market, 3) Segment, 4) Targetmarket, 5) Customers. The brand pyramid of Nano talks about the people who arewilling to travel which comes in the market part of the pyramid, then thetarget market is the people who want to travel on a 4-wheeler, the third barwhich is the segment tells the areas which are focused geographic, demographic,and also the usage for example family and personal use. The second last bar istarget segment which tells about the areas in a briefer way, life cities, ruralareas and also the income groups which are lower and middle class which can befamilies or students.
The last bar shows the customers which can be lower and middle-classfamilies who want a 4-wheeler, or youth who want to try a trendy vehicle withgood safety, features and low cost. Branding is very important not only for thebrand itself, but also for customers and intermediaries. If a brand offersloyalty to its customers, for example if Tata Nano is offering loyalty then itis more likely for its customers to be its regular customer and to considertheir duty to recommend it to others. Moreover, branding also advantages theintermediaries because if a brand is already famous and well-known it will beeasy for them to recommend those brands.
Tata being a very famous manufacturerwould easily get recommended by intermediaries because of the brand image ithas. When talking about brand equity the word “Brand Equity” answers for itselfbrand equity describes the brand’s value, it is the value which is determinedby a consumer’s perception regarding their experiences with the brand. TataNano came up with a tag line called “Khushiyon ki chabi” (Key of happiness)this made every person wanting a car at a low price happy, because whoever oncesaw I dream of buying a car can now fulfill it because of Tata.
Tata Nano gavethis message to the entire nation that cars were not just for the rich, anyonewho had a low budget could now buy a car. Tata Nano used advertisements andmedia to tell everyone about the new “1 lakh car to fulfill all your dreams”.After all the steps Tata took to promote Nano and to make people happy itautomatically increased the brand equity since the customers would be satisfiedby the brand because it was fulfilling all their needs. Tata Nano came up witha marketing plan in which they first segmented and then targeted the populationof India. Firstly, came the middle class in which lower and upper lower classeswere included. Secondly people who use two-wheelers and lastly family who hadmore members but were travelling on a two-wheeler. Tata launched Nano in thesegment of cost leader in the broad because that is the lowest cost ofoperating and it would attract more people of the population. In 2013 TataMotors re-launched Tata Nano with new features and advertising campaigns.
There-launch of Nano had four main aims first of them was to focus on the youth ofthe country, second the rational benefits, third the tie ups and lastly thesafety. Nano targeted the youth in such a way that now the car had fancysettings and different color combinations like farm side or adventure sports.The rational benefits were that there were new advertisements and campaignswhich now told the customers “Why not buy a Nano when it gives everything at ahalf price” and it also talked about how fuel efficiency could benefit. Whiletalking about the tie ups Tata Nano now sponsored tv programs on MTV which werelinked to adventure sports for example the contestants of series Roadies wereasked to travel across India in Tata Nano, this also showed how tough the carwas.
Last but not the least the most important thing the safety, theadvertisements were made to make the parents realize how travelling on a bikeis not safe and how they can give their kids a Tata Nano at the same pricewhich would be safer. Nano faced many issued after its launch, in the start thesales were very high but with time the sales started declining. The problemsnoted with the car were that Nano was not a car that could take to hillyterrains, the engine of the car used to make a lot of noise and at times manyengines were catching fire because of excess heating. Moreover, the interiorwas not so good the car had very little leg space and the body of Nano couldget easily spoilt because of being light weighted. Nano also faced pricerelated issues because Nano was promised to be sold as 1 lakh rupee but whenpeople were going to the market the price was Rs. 25 thousand more.
The issueswith promotion were that since there was hype in the market for Tata Nanoinstead of becoming the smart car of the market it became “The Cheapest Car”. TataNano should have planned first how to deal with its crisis. The issues with thecar should have been looked into before bringing the car into the market alsothe interior was not such of an issue because that depends on the passengers.Furthermore, Tata Nano should inform the people first about the ‘exact’ pricebefore launching it in the market. The promotion problems could be handled veryeasily because every person has their own point of view. Tata Nano should haveseveral surveys online about Nano’s launch since it became so popular andalmost everyone has access to the internet. The surveys could actually helpTata Nano and its customers interact with each other and this would alsoincrease the brand equity of Tata Motors. Howbrands are organized in portfolios and how hierarchies are built and managedover time Abrand portfolio of a brand is not just about a specific product it is about thebrand over all.
Whenresearching about the brand portfolio of Tata Nano, first step is to look atthe parent brand which is the Tata Motors under which all the cars aremanufactured. Since, Tata Nano is a light weight car only look at some of thecars of Tata Motors which are somewhere like Tata Nano and not heavy vehicles. Thelaunch of Tata Nano was to address the part of the population which waspreviously unaddressed and Nano itself created its own name in the market. Atthe time of Nano, the competing brand was Maruti 800 which was for 2.5 Lac andhigher than Tata Nano. The launch of Nano put Maruti in a high stage ofcompetition which eventually made them discontinue the manufacturing of Maruti. Howbrands are leveraged/ extended over time domestically and internationally TataNano which was the cheapest car faced many downfalls but Nano is coming up witha new project they are launching an electric version of Tata Nano. The electriccar will be launched under the “Neo” brand.
The new Nano would be sold inEurope. There were two main reasons why Nano thought of launching the electricversion of Nano, one of the reason was that Nano itself was not bringing anyprofit it was said to be a loss-making car, second reason is that an electriccar would lower the rate of pollution and also day by day there is a high rateof increase in carbon emissions. The launch of the new Nano electric car willhelp Nano gain its respect in the market again. Before the launch this timeNano should carry out a proper market research and then launch the new Neoaccordingly.
Tata Motors plan to launch Nano in the United States was a part ofTata Motor’s to become a global carmaker. The launch of Nano in the US would bea new and improved Nano. Tata Nano which will be supplied to the US will bewider and also will be equipped with modern and better safety equipment’s likeadvanced breaking system. Techniquesfor measuring brand value over time Theyear from Nano’s launch to 2010, 20 percent of the buyers of Nano were in theage group of 25 to 34.
Nano’s advertisements today compared to the first Nanowhich was Nano ‘aa gayi campaign’ is a change in colors and music which isliked by the young generation. Tata Motor’s new chairman Cyrus Mistry said thatNano will be repositioned again as a “smart city car”, also the commercial ofthe new Nano had five million views on YouTube in just 30 days which was arecord according to The Economic Times. The latest Nano is called the NanoTwist, with a new color called ‘damsel purple’ and also a music system withBluetooth connectivity and keyless entry. Moreover, the other idea was tolaunch the Nano Twist in some other country like Indonesia because over thereNano will be new and then it would come back to India with a new image.
A brandaudit is an examination of a brand’s current position in the market compared toits competitors and it also shows the new growth opportunities for the brand. Brand audit TataNano’s old marketing team was taken over by a new team which came up with newstrategies like an extended warranty and a Rs.99 a month for maintenancecontracts, with new advertising campaigns.
Tata has made it easy for the walkin customers to get its car financed by SBI and other banks but if someone isnot eligible Tata Finance steps in and provides with the finances with a fixedinterest rate of 13.5%, which has been never done by any firm in the automotiveindustry’s history. ConclusionTheautomobile industry is the most famous industry in the entire world but it hasan immense place in India. Tata Motor’s launch of Tata Nano as a dream car ofcommon man of India did not meet the given expectation because instead ofgetting known as an affordable car for everyone it got known as world cheapestcar. The mistake which Tata Motor’s made was that they did not know how toposition Nano properly, the positioning of Nano a “cheap car” ruined the brandimage of Nano and also the performance of the car became terriblyunderwhelming. When launching a product in the market it is very important tofirst understand the mindset of the consumers.
Nano was said to be a cheap carand also the poor could now easily buy it, after having this in their mind noneof the poor people would even consider buying Nano because they would not wantto be known as poor.