Tata Nano: Failure of a Dream
Updated: Jan 10
Business is all about the marketing mix i.e. 4Ps - Price, Place, Promotion and Product. And for Tata Nano, it seems none of this was done correctly, to say.
Nano failed as a Product, itself: There are few factors that drive how the product is perceived by end users and it is largely dictated by their expectations, needs and requirements that the product would satisfy. It should be targeted at the prospective customer.
In Nano case, the product failed in customer expectations as we Indians have tendency to purchase products to showcase it in the society and have bragging rights. Just like, I would say "Neighbors envy, Owners Pride".
It failed to understand the basic demands of the end users, as they expected a good car which could compete with the market leading cars on price and features. What Nano was is just a Utility Vehicle and was in a segment where consumers would be confused between a Good bike and Cheap car.
Failed to understand the targeted use: Indian Family, consisting of 5 people would want to commute in car comfortably without having to compromise on space and comfortness as a whole. Nano, with compact car model, had space constraints resulting in families to adjust or look for alternatives.
Nano, failed on Price: While Tata Nano was promised to be 1Lac car, it had to later change the price to 1.2 to 1.5 L range due to repositioning, adjustments to the car to be better perceived and several other reasons like moving the factory from Singur to Gujarat, resulting delays and setup costs. A promise made is to be kept and in this case, it was too difficult to stay with the promise even for TATA's.
Nano, failed on Promotion: Nano was promoted was World's Cheapest Car. This hurts the ego and pride of the Indian middle class buyers who are primarily the main targeted segment for this product. For e.g. You are at a signal with your Nano and another car parks adjacent to you waiting for signal to turn green, and someone passes a comment saying, "See the world's cheapest car", it will definitely hurt one more.
Nano, failed on Place: Nano, neither had Speed nor Power to handle the rigors of Indian Roads which are tough for even some of the best cars out in market, with potholes, uneven inclination, incorrectly built speedbumps and so on. Neither it was built to handle motor ways (highways) not muddy roads with tyres looking fragile than Indian Autos.
Inability to manage PR correctly: People got to know immediately that the Nano cars are catching fire on some reasons, but none got to know how the rest of the cars are running beautifully. Most of the targeted segment were first time buyers who would easily be thwarted by such news, thus emphasizing on the fact that Managing PR is extremely important.
Initial Waiting period: Longer wait times resulted in negative way as several customers went empty handed who on contrary could have potentially flooded the market with Nano's.
Thorough and Complete Market Analysis: Complete market analysis is the need of the hour. It should be done on consumer requirements, needs, demands, and expectations. Adding some good features and improving the look of the car would be the first thing to start with.
Redesigning Nano Structure: Overall Body, space, and small tyres are not sufficient to tread on Indian roads which are very uneven. Existing Nano body is meant for good roads which are far and few in India. So, redesign the structure and putting bigger tyres could help in providing stability on Indian Roads.
Reposition the Brand Image of Nano, again: Indian People are very sensitive just like Indian Market is price sensitive. Cheap car tag was interpreted as cheap in quality as inferior grade would be used to manufacture car to match its price. It can be rebranded as "Family Car" or "Home in Car".
Adept and skilled Marketing team: Team should be better trained to handle issues and problems that arise to revolve and spin off in better ways.
Use Innovative and Integrated Marketing Communication tools: To be able to effectively use Advertising, Promotion, PR and Publicity together to help position the product in a better way.
This shows how important it is to Position a product and how effective marketing can lead a product to be an innovation and not a failure.