Abstract

This case study is about the revival of Tata Motors’ ultra low-cost car – the Nano. The Nano’s sales figure touched the bottom in November 2010 but after implementation of certain strategies, the Nano crossed the 10,000 mark in April 2011. Since the beginning, this car of Tata Motors had caught the attention of the world, but sales failed to live up to expectations. There were many reasons for this which compelled Tata Motors to sit back and prepare a revival plan. Implementation of the revival plans helped the Nano to be ranked sixth among the passenger cars in India. Automobile experts felt that attractive and effective television advertisements, providing of additional protection in the exhaust system of the car to avoid fire incidents, extended free of cost warranty schemes, incremental rise in sales points in smaller towns, and introduction of the 90% financing plan through its in-house vehicle financing unit Tata Motor Finance, had made this possible. But one major discussion point, which this case brings forth, was the ever increasing price of Tata Nano. This car was initially targeted at the middle class segment which rode on bikes and could not afford a car. But because of its increasing price, it was slowly slipping out of the reach of this segment. This case is meant for MBA/MS students as a part of the Product Management/ Marketing Communication/ Marketing Management curriculum. It can also be used in a core Strategy curriculum.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the issues and challenges in new product launch.
• Appreciate the importance of Financing, Marketing Communication, Safety issues, and Distribution channels in the Automobile Industry.
• Analyze the pros and cons of media hype before product launch.
• Understand why the target segment earlier rejected the Nano.
• Discuss and debate what kind of effect the increasing price of the Nano and the new entrants in the low-cost car segments will have on the Nano’s sales.

Keywords

Product management, Marketing communication, Revival, out-of-the-box thinking, innovative marketing ideas, Pricing, Distribution, Business level strategy, Competitive strategy, Competition, Blue Ocean Strategy, Turnaround, Automotive industry, Tata Nano, Tata Motors