Tata Nano Case Study

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Old and retired people:

I am free now in my life as retired from my job. I feel bored sitting at home all day. I want to go to a park for walk, visiting a temple and cannot go on my own and all the rest of the family members are busy to help us. I can take my wife out too.

Used car buyers:

I want to buy a used car within a budget of not more than 2 lakhs, as I have less disposable income.

Lower middle class:

It’s a dream to own a car. Nobody in our whole family owns a car. A car will give us freedom and status. Buying a car will give us a sense of pride and achievement.

Middle class:

This group has disposable income and they can afford a car. It is a hassle to use public transport or auto rickshaws to travel. They can make the best of a small budget car. They can attend parties or weddings and family together and not have to worry about waiting for autos or cabs. Comfort and safety within their budget is considered a smart option.

Upper Middle Class:

This class has good levels of disposable income. They own one or more cars and are used for attending parties or events or by men who have a high profile job. Most often they own a big car or a family car. They are looking to buy another car for daily activities or to help in household work.

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Best Target Markets

Middle Class: (Farrell & beinhocker, 2007)

- Can afford to buy a car. May be a first car for the family. Users of two wheelers for daily needs.

- Family of 4 or 3/Nuclear. Are very much conscious of their social status and self-pride.

- They would need a car within their budget as they don’t want to over spend but at the same time want others to perceive that they are below the belt.

- Usually go out once or twice on weekend for dinners or movies. These families spend wisely and budget smartly. Earning member is mostly the male adult of the family. (Mid-level managers )

- Treat themselves with nice things sometimes to make them feel good and appreciate themselves.

- They are ambitious and work hard to better their standards at every stage of their life.

Upper Middle Class:

Multiple uses of having a small car - Men buy this car for the ladies of the household for various reasons.

- The women of the household don’t have to wait for someone to help them or to hire a cab every time they have to go out for shopping.

- It is convenient having a car when they have to pick up and drop their kids from school.

- They can let their kids go to college since it’s a small car. [pic 13]

- They can send their maids to get the daily chores done so a small vehicle would suffice rather than using their fancy vehicle as there is always a fear of car accidents on Indian roads.

- Safety of women is a top concern for families. But the men are busy working and cannot afford time so buying a small car for the women of their family will save time.

- Married women in their thirties have a very active lifestyle. With husbands working all the time and maids to take care of their household responsibilities; women take part in events, become members of social clubs and attend kitty parties. They need smart but small cars that are easy to park and drive in narrow lanes.

- They want freedom and a car ensures that they don’t have to depend on their husbands to drive them around.

- For elderly parents to go out when visiting a temple or for hospital visits. A way of showing that they care for their parents.

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Target Markets

Upper middle class and Middle class:

Measurable

Yes

Accessible

Yes

Profitable

Yes

Tata Nano should capture the Two-wheeler customers and they come from Middle class segments. They have disposable levels of income and the income level is increasing with the day. Since India is a developing country we have majority of the population in the middle class segments.

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Domestic Market Share (2013-2014)

Passenger Vehicles

14

Commercial Vehicles

3

Three Wheelers

3

Two Wheelers

80

(Tata Nano), (Domestic market share 2012-2013)

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Product to position

Product:

Stylish looking exteriors, elegant design, modern, colors, fashionable, for youth

Status, Smart Car, Car for Aspiring Indians (Thakkar, 2013)

Value for money, reliable, Comply safety measures, Remote locking, Auto return or power steering, power brakes

Rename: Tata smart

Price:

Affordable, maintain the existing rate, Value based pricing strategy

Customizing option provided at additional cost

Place:

Company owned outlets, Dealers

Sales and Service dealers

Promotion:

Bank on Tata’s Brand name,