Revival of Tata Nano: Can the World's Cheapest Car Maintain the Momentum?

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : MKTG286 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Brand Management / Business level strategy / Marketing Communication
Case Length : 13 Pages
Period : 2010-2011
Pub Date : 2012
Teaching Note : Not Available
Organization : Tata Motors
Industry : Automotive
Countries : India

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.

Issues:

The case will help the students:
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.
Explore ways in which Tata Motors can overcome the threat of increasing competition.

Contents:

  Page No.
Introduction 1
Background Note 2
About Tata Nano 2
The Downfall Saga 4
Reviving the Nano 5
A Spectacular Comeback 7
The Road Ahead 7
Exhibits 9

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

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