DISSERTATION REPORT On

Customer behaviour towards Tata NANO

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF: SUBMITTED BY: Mr. Zahid Raza khan sir
SENIOR LECTURER FACULTY OF MANAGEMENT & NO.1100122085 RESEARCH SESSION 2011-2013

Mohd.MAHTAB
M.B.A. II SEMESTER ROLL

INTEGRAL UNIVERSITY DASAULI, KURSI ROAD, LUCKNOW 226022 EMAIL www.integraluniversity.ac.in

ACKNOWLEDGEMENT

I would like to thank Honble Prof. Dr. Zeeshan Amir, Dean Faculty of Management and Research along with Mr.Zahid Raza Khan & all the faculty members of my University for their guidance & support. I would like to extend my heartfelt thanks to all those who have supported me in completing my Project report, without their help and motivation; the completion of the Project report would have not been possible.

I would like to express my gratitude to my project guide Mis. Asma Faroque for giving me the valuable time, guidance & advice during the course of my project.

Besides, I would also like to thank all the staff members who have imparted us with various ideas, which will very beneficial for us.

Lastly, I would like to thank my friends who kept up my motivation & provided me with all possible help during Project work.

MOHD.MAHTAB
2

MARKTING M.B.A. 1st YEAR ROLL NO.1100122085

CERTIFICATE

FACULTY OF MANAGEMENT & RESEARCH, INTEGRAL UNIVERSITY, DASAULI, KURSI ROAD, LUCKNOW 226026 Email: www.integraluniversity.ac.in This is certified that Mr. MOHD. MAHTAB, student of MBA II SEMESTER, Roll No :1100122085 has completed her project on the Topic, Customer behaviour towards Tata NANO under my supervision & guidance. The behavior of the student during the project was found to be highly appreciable & satisfactory. Wish him all the best for all her future endeavors.

Mr.Zahid Raza khan sir

3

SENIOR LECTURER

Faculty of Department of Business Management & Research

INDEX
S.NO. CONTENT PAGE NO.

INTRODUCTION EXECUTIVE SUMMARY MARKET OVERVIEW COMPANY PROFILE ABOUT NANO NEW PRODUCT DEVELOPMENT

5-6 7-8 9 10-13 14-26 27-40

LITERATURE REVIEW

41-44

OBJECTIVES

45-46

RESEARCH METHODOLOGY

47-50

DATA ANALYSIS LIMITATIONS

51-61 62 63 64 65-67

SUGGESTIONS BIBLIOGRAPHY

QUESTIONNAIRE

CHAPTER 1

INTRODUCTION

Executive Summary
Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1 lakh i.e. approximately USD 2000. It is manufactured by Tata Motor Limited, the largest to automobile company in India. Its Chairman, Mr. Rattan Tata envisions that Tata Nano become a Peoples car which is affordable by almost everybody. Tata Nano was first launched in India on 1st April 2009 and expected to be in Indian market by July 2009. Since launching, it has created a huge buzz all over India. Within the first two days of lunching, it has received 5500 booking. The figures keep increasing everyday since the launching.What makes Tata Nano so cheap? Basically, by making things smaller, lighter, do away with superficial parts and change the materials wherever possible without compromising the safety and environmental compliance. It is said that Tata Nano has better mileage than Toyota Prius and same gas emission as a scooter Tata Nano will be imported to Malaysia by Tata Industries in parts. It will be assembled in its two factories i.e in Shah Alam, Selangor and Pasir Gudang, Johor Bahru. There are four distribution centres in Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahru and Kantian. All Tata Nano cars will be distributed through these distribution centres only. Order can. be made vide these distribution centres or its web site. There are three types of Tata Nano car available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. However, due to hot weather in Malaysia, only Nano CX will be brought to Malaysia and will be sold here. The selling price of Nano CX in Malaysia is RM 13,704 per unit. It is estimated that gross profit for the first year would yield xxx, second year xxx and third year xxx Estimated monthly instalment payment is xxx for seven years period. With this price, the target market is very wide which includes those with income RM 2000 per month, students female workers and scooters riders. Introduction: India is an emerging country with huge potential. The domestic economy is now growing at around 9-10% per annum and Indias importance in global terms is being reinforced by rapidly rising exports and domestic consumption. At a time when numbers of a slowdown and overheating in the Indian economy have started gaining momentum, the Indian rupee sprang a surprise by pushing the GDP figure past the trillion-dollar (42,00,000 crore) market .The automotive industry is at the center of Indias new global dynamic. The domestic market
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expanding rapidly as incomes rise and consumer credit becomes more widely available. Manufacturers product lines are being continually expanded, as is the local automotive manufacturing base. Expectation are high that India can develop as a global hub for vehicle manufacturers and as an outsourcing center that offers the global automotive industry solution high up the automotive value chain. India eyes 25 million automotive jobs .India's GDP is set to doubleover the next decade In percentage terms, the automotive industry's contribution should also double .In dollar terms, the sector's contribution is set to quadruple to some $145bn.The automobile industry in India accounts for a business volume of $45 billion and has the potential to grow much faster both through Indian as well as international manufacturers who have established huge facilities in the country With the worlds second largest and fastest growing Population, there is no denying Indias potential in both economic and population terms and the effect it will have on the auto industry in the years to come. The country is already off to a good start, with a well developed components industry and a production level of 1 million four wheeled vehicles a year, plus a further 5 million two- and three-wheelers. The implications, market drivers and scope of a future massive Indian vehicle market are covered in the India Strategic Market Profile, a brand-new forecast of Indian automotive and related activity to 2020. Based on Max Pemberton's unique relational long-term forecasting model, it forecasts car and CV sales, demographics, materials usage, auto industry employment, and explains their interyear of healthy growth in auto industry.

Market overview
The passenger vehicle market, which constitutes around 80% of automobile sales, has immense growth potential as passenger car stock stood at around 11 per 1,000 people in 2008. Anticipating the future market potential, the production of passenger vehicle is forecasted to grow at a CAGR of around 11% from 2009-10 to 2012-13. The recent launch of Tata Nano has brought about a new revolution in the countrys small car segment. Seeing the good initial response from consumers, many other players in the industry are chalking out their plans to launch cars in this segment in the next few years. Our research foresees a CAGR growth of around 12% in domestic volume sales of passenger vehicles during the forecast period. Other segments, such as two-wheelers, multipurpose vehicle and light commercial vehicle, are also expected to witness fast growth in coming years. The report covers various aspects of the Indian automobile market and gives detailed analysis of its various segments such as passenger vehicle, commercial vehicle, utility vehicles, multi-purpose, two wheelers and three wheelers. Each section succinctly explains the current and future market trends, and developments in the Indian automobile market. There are immense opportunities for various industry players including automobile manufacturers and players of automobile components. Besides, we have also comprehensively analyzed the auto component industry and its future outlook. The study has evaluated growth avenues available for the automobile market, which include automotive design market, non-conventional vehicle market, domestic tyre industry, India as global manufacturing hub, green car market etc.

10

Company Profile:Tata Motors Limited is India's largest automobile company, with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. The company's 24,000 employees are guided by the vision to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat power trains. The company is establishing a new plant at Sanand (Gujarat). The company's dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market,

11

while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano 's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint, established through exports since 1961. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South America. It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa. The foundation of the company's growth over the last 50 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centres in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck.

12

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at Rs.100,000 (excluding VAT and transportation cost). Designed with a family in mind, it has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Its mono-volume design will set a new benchmark among small cars. Its safety performance exceeds regulatory requirements in India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being manufactured in India today. The lean design strategy has helped minimize weight, which helps maximize performance per unit of energy consumed and delivers high fuel efficiency. The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint. In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry, in keeping with its pioneering tradition, by unveiling its new range of world standard trucks called Prima. In their power, speed, carrying capacity, operating economy and trims, they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost. Tata Motors is equally focussed on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation.

13

Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. Tata Motors is committed to improving the quality of life of communities by working on four thrust areas employability, education, health and environment. The activities touch the lives of more than a million citizens. The company's support on education and employability is focused on youth and women. They range from schools to technical education institutes to actual facilitation of income generation. In health, our intervention is in both preventive and curative health care. The goal of environment protection is achieved through tree plantation, conserving water and creating new water bodies and, last but not the least, by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care. With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

14

ABOUT TATA NANO

15

16

(b)SPECIFICATION

OF TATA NANO

DIMENSIONS

Overall Length Overall Width Overall Height Wheelbase Ground clearance Min. Turning Circle Radius

3099 mm 1495 mm (& 1620 mm with ORVM) 1652 mm 2230 mm 180 mm 4m

DIMENSIONS

Seating Capacity Fuel Tank Capacity Kerb Weight Nano Nano CX Nano LX Payload

4 persons 15 Liters

600 kg 615 kg 635 kg 300 kg

ENGINE & TRANSMISSION

Engine Type 624 cc, 2 cylinder, MPFI

17

(c)FEATURES OF TATA NANO

EXTERIOR

DETAILS Colors

NANO Ivory White, Racing Red, Summer Blue Black Style-in-Steel Wheels Yes Airdam 2 speed Plain -

NANO CX

NANO LX

Sunshine Yellow, Cham Ivory White, Racing Red, Summer Blue, Champagne Gold, Lunar Silver Gold, Lunar Silver Black Style-in-Steel Wheels Yes Yes Airdam 2 speed Tinted Yes Yes Body Colored Yes Yes Half Wheel Covers Yes Yes Airdam 2 speed + Intermittent

Body Color Bumpers Body Color Door Handles ORVM (Driver Side) Front Fog Lamps Rear Fog Lamps Wheel Covers Clear lens Headlamp & Tail lamp Tinted Glasses Aero kit Front Wiper & Washer Front Windshield Roof Beading Spoiler

Tinted with Top Blue B Yes Yes

18

INTERIOR

DETAILS Seat Upholstery Door Trim Roof Lining Rear Parcel Shelf A & B Pillar Trims Electronic Trip Meter

NANO Single Tone Vinyl Single Tone Vinyl Jute Based -

NANO CX Dual Tone Vinyl Dual Tone Vinyl Polyester Fabric Yes Yes Yes Digital Yes 2 Spoke

NANO LX Complete Fabric

Vinyl with Fabric insert Polyester Fabric Yes Yes Yes Yes Digital Yes 3 Spoke

Instrument Cluster Illumination Yes Fuel Gauge Front Room Lamp Steering Wheel Digital Yes 2 Spoke

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FORT & CONVENIENCE

DETAILS AC with Heater Front Power Windows Cup Holders in Front Console IRVM

NANO Plain

NANO CX Yes Plain

NANO LX Yes Yes Yes Antiglare High End Console with

Gear Shift Console

Basic

Basic

Provision for Mobile Ch Cigarette lighter

Magazine and coin Holder on all doors Map pocket Integral with Driver Fabric pocket & Cod river Seat Front Seat Headrests Rear Seat Headrests Super visor on Driver & Passenger side Integrated Yes

Molded Door Trim

Fabric pocket Integrated Integrated (With Nap Rests) Yes

Separate plastic trim Integrated

Integrated (With Nap R Yes

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Driver Seat with Slider Passenger side Seat with Slider Front assist grips Rear assist grips

Yes Yes NA

Yes (With Recliner) Yes (With Recliner) Yes NA

Yes (With Recliner) Yes (With Recliner) Yes NA

Head lamp leveling

Integral feature through Integral feature through innovative innovative suspension suspension design design Yes Yes

Integral feature through innovative suspension design Yes

Low Fuel Warning Lamp

Rear Seat Folding

Yes

Yes

Yes

21

SAFETY & SECURITY

DETAILS Central Locking Center High Mount Stop Lamp Laminated Windshield Door Lock on Driver Side Door Lock on Passenger Side Booster assisted brakes Front & Rear Seat Belts

NANO Yes Yes Yes Yes Yes

NANO CX Yes Yes Yes Yes Yes Yes

NANO LX Yes Yes Yes Yes Yes Yes Yes Yes

22

Additional body reinforcements

Intrusion beam

Integral feature through Integral feature through innovative innovative door system door system design design

Integral feature through innovative door system design Yes

Radial Tubeless types

Yes

Yes

23

(d)COMPARISION OF TATA NANO

Details Airconditioner

Nano CX

Nano LX

Maruti 800 Std -

Maruti 800 Alt Alto AC o LX -

Alto Lxi

Santro NonAC -

Santro Santro GL GLS

Heater

Front Power Windows

Central Locking

Body Colored Bumpers

Handles & ORVM

Front & Rear Fog Lamps

Tinted Glasses

Digital Fuel

24

Gauge*

Tubeless Tyres*

OVERALL COMPARISON

Details Base Model Plus Air Conditioner Plus Heater Plus Tinted Glasses Fully Loaded Plus Front Power Windows

Nano Nano Nano CX/LX Nano CX/LX Nano CX/LX Nano LX Nano LX

Maruti 800 M800 Std M800 AC

Alto Alto Alto LX/LXi

Santro Santro Non-AC Santro GL/GLS Santro GL/GLS Santro GL/GLS Santro GLS

Feature Not Available Alto LX/LXi M800 AC M800 AC Alto LX/LXi Alto LXi

Feature Not Available Feature Not Available Santro GLS Santro GLS

Plus Body Colored Bumper, Door Nano LX Handle & ORVM

Feature Not Available Feature Not Available (Only Body Colored Bumper)

Plus Central Locking Plus Front & Rear Fog Lamp

Nano LX Nano LX

Feature Not Available Feature Not Available Santro GLS

Feature Not Available Feature Not Available Feature Not Availab

25

DIMENSION COMPARISON
Details Overall Length (mm) Overall Width (mm) Overall Height (mm) Wheelbase (mm) Ground Clearance (mm) Min. Turning Radius Seating capacity Kerb Weight Nano 3099 mm Maruti 800 3335 mm Alto 3495 mm 1475 mm 1460 mm 2360 mm 160 mm 4.6 m 5 persons 720 kg (Alto)

1495 mm (1620 mm with ORVM) 1440 mm 1652 mm 2230 mm 180 mm 4m 4 persons 600 kg (Nano) 615 kg (Nano CX) 635 kg (Nano LX) 1405 mm 2175 mm 170 mm 4.4 m 4 persons 650 kg (Std) 655 kg (AC)

735 kg (Alto LX/LX

26

ENGINE COMPARISON

Details Displacement (cc) Maximum Power Maximum Torque

Nano 624 cc 35 PS @ 5250 +/- 250 rpm 48 NM @ 3000 +/- 500 rpm

Maruti 800 796 cc 37.3 PS @ 5000 rpm 59 Nm @ 2500 rpm

Alto 796 cc

47 PS @ 6200 rpm

62 Nm @ 3000 rp

TATA NANO STANDARD AND CX

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New Product Development And Nano

As seen before, A product can be considered new under the following situations: New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of existing products Repositioning Cost reductions

As far as Nano is concerned, it falls into new to the world products in the context that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis. It can also be considered as new product in the since of cost reduction as its the first time in the history that such a cheap car is produced. The story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of todayan eager, ambitious nation with a combination of engineering talent, a desire for low costs and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nanoon average aged between 25 and 30has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in an unexpected side-benefit called "organizational innovation".
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Idea Generation And Nano A dream is born Says, I observed families riding on two- wheelers -- the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. Add to that the slippery roads & Night time too. It is downright dangerous. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family. So when Tata Motors needed someone to take charge of the company's most ambitious plan yet to build the world's cheapest car ever Ravi Kant, who by then had become the company's managing director, again turned to Wagh. Wagh remembers what he learned marketing the little truck. "People want to move from two-wheelers to four-wheelers," he says. "Today they can't afford it." More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month. If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year. Idea screening The next step was the screening of idea. How is this dream possible? What should they make? A scooter with two extra wheels at the back for better stability? An Auto-rickshaw with four wheels?
29

 A three wheeled car like a closed auto- rickshaw?? A four wheeled car made of Engineering Plastics? A Four wheeled rural car? Rolled up Plastic curtains in place of windows? Openings like Auto rickshaws from the side A four wheeled open car with safety side bars? But the market wanted a car and if they build a peoples car it should be a car and not something that people would say, Ah! Thats just a scooter with four wheels or an autorickshaw with four wheels & not really a Car. Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years ago when Rattan Tata, longtime chairman of Tata Motors and scion of the nation's giant Tata Group conglomerate, first mentioned his dream of building a one-lakh car in 2003. "They are still saying it can't be done," he says, insisting that it can and will. "Everybody is talking of small cars as $5,000 or $7,000. After we get done with it, there will hopefully be a new definition of low-cost." Concept Testing And Developing Before starting the project, Wagh did something no one at Tata Motors ever had: He talked to customers. The three-wheeler men inevitably insisted on a cheap, dependable truck that could go from village to market carrying, say, a ton of onions or potatoes, one night, as sunset approached, Wagh stuck with one rickshaw driver. He says, "I kept asking the question. Why? Why? Why do you want a four-wheeler?" Wagh remembered. Finally, he got the real answer. It turned out it wasn't really a problem of transportation of vegetables If I had a four-wheeler, I would have better marriage prospects in my village," the young man said. Drivers of three-wheelers are looked down upon in India. Wagh realized that four wheels had emotional, not just practical, appeal.
30

Thus the new product was now to be developed. But what type of product? The car to cost Rs. 1 lakh on road. The car should be built on a different platform than conventional ones. It must be meeting all the safety and regulatory requirements. It has to be built on a scale which shall be more than double the earlier launches of similar products and the ramp up must be smooth. The car has to be designed so that it can be exported to other countries as the domestic demand may not materialize as per projectionsThe car must be a beacon for the IndianAutomobile industry and prove to the world that we are capable to take any challenge and come out worthy winners. That quest to build the world's cheapest car hasn't ended. The Nano should be available this fall, but the mission began back in 2003, when Rattan Tata, chairman of Tata Motors and the $50 billion Tata conglomerate, set a challenge to build a "people's car". Tata gave an engineering team, led by 32-year-old star engineer Garish Wagh, three requirements for the new vehicle: It should be low-cost, adhere to regulatory requirements, and achieve performance targets such as fuel efficiency and acceleration capacity. The design team initially came up with a vehicle which had bars instead of doors and plastic flaps to keep out the monsoon rains. It was closer to a quadricycle than a car, and the first prototype, even a bigger engine, which boosted the power by nearly 20 per cent, was still dismal. "It was an embarrassment," says Wagh. But failure didnt stop them they quickly realized it was necessary to bring everyone on board, "else it leads to last-minute heartache and delays". Every morning, he would spend an hour or two on the floor of the Pune factory, insisting that everyone involveddesigners, manufacturing teams, and vendor development peoplebe there to accelerate decision-making and problemsolving. Over time, Wagh's team grew to comprise some 500 engineers, an impractically large group to gather on a daily basis. So instead, a core team of five engineers gathered every day at
31

three pm to discuss the latest developments. Each engineer represented a different part of the car: engine and transmission, body, vehicle integration, safety and regulation, and industrial design. The body had to be changed because Rattan Tata, over six feet tall himself, wanted it to be easy for tall people to get in and out of the car. "Imagine the plight of the body designerhe went through hundreds of iterations, then at the last minute the car length was increased by 100 millimeters!" Wagh says. The attention to detail paid off: When the car rolled onto the dais at the Auto Show in New Delhi in January, and Rattan Tata stepped out of the driver's seat with ease, it made an immediate impact. What shook the automobile world most was the fact that the designers seem to have done the impossible: The sleek, sophisticated Nano doesn't look flimsy or inexpensive. If it had been an upgraded scooter on four wheels, Tata still would have been applauded for making a family of four safer on Indian roads. The Nano, however, affords both safety and status. "The innovation wasn't in technology; it was in a mindset change". Business Analysis Cost Since the car had to be built within a cost of Rs. 1 Lac, no conventional design would work as the costs shall be higher and so the entire car has to be redesigned.

32

What makes Nano so less expensive can be well understood from the following diagram

The design has to question the need of each and every component from the point of view of its necessity of existence and also the minimum requirements of its functionality. Value Engineering concepts have to be deployed to finalize the minimum requirements.

Disruptive Technology: Is a Technology that brings radical change by introducing new ways of doing things usually at a Technology that is: 33

 Significantly cheaper than existing Technology. Is much higher performing? Has greater functionality and Is more convenient to Use. Brings to market a totally different Value proposition than the one available and can change the Paradigm about a product.
The Guiding factor was that the cost has to be minimized for each component yet maintaining its basic functionality. The Alternatives are:

Reduce Consumption of Material being used. Alternate Suppliers to get same material at fewer prices. Use alternate materials. Eliminate use of Material. Eliminate a process Or a Combination of the above.
The design was outsourced to Italy's Institute of Development in Automotive Engineering, but Tata himself ordered changes along the way. Most recently he vetoed the design of the windshield wipers. His solution: a single wiper instead of two, giving the car a cleaner look.

THE COST REDUCTION PARADIGM Value Engineering Alternatives: 34

The target was very clearly defined that within the given cost structure of 1 Lac all the components have to be allocated a maximum price and the same had to be achieved using the available alternatives. The Guiding factor was that the tax structure, on materials and manufacturing, must support the final cost of Rs. 1 Lac. The Decisions were:

Establish factory in a tax free zone. Get the tax advantages on infrastructure development. Get the suppliers to establish base near the factory. Get special concessions from State Govt. In short select a manufacturing location where all the advantages could be achieved.
In short select a manufacturing location where all the advantages could be achieved. Total sales estimation Now the question was, how much to produce

It was estimated that the demand for the peoples car shall be at least twice the demand for Maruti 800, the lowest end car. Initial projections were at about 500 K cars per year. The basic reason was the conviction that the target price shall redefine the 4 - wheeler segment. The price decision of Rs 1 lakh is definitely going to make a lot many people transit to 4wheeler fold and that shall explode the demand. F only 10% customers of 9 Million two wheeler market transit to 4-wheelers it shall amount to 50% of the passenger car market share.
35

 It was decided to set up plants with 5 lacs cars per annum capacity and ramp the same up in stages, in line with increase in market demand.
The initial response to the Nano has been overwhelming and the tiny, Noddy-land car is expected to help the company cross several milestones. With revenues at Rs 1,29,994 crore for the financial year 2006-7, and group companies enjoying a market capitalization of Rs 2,51,487 crore as on January 10, 2008, the Tata Group is on a strong footing, contributing more than 3 per cent to India's GDP. Nano, being the world's cheapest car, has made international players sit up in amazement and the company has received proposals from some African, Latin American and Southeast Asian countries to manufacture the car there. Product Development

And finally the product was developed with the following features. Engine Capacity Bosch 624 c.c. twin cylinder

Low capacity, Lighter, sufficient with better Power Rear Engine to reduce the transmission length using a balancer shaft. 4 Speed Manual Gear Box All Aluminum Engine Higher thermal conductivity than cast iron, Lighter and so better mileage Engine Management System by Bosch Superb control over emission and smooth acceleration. Dimensions L: 3.1m, W: 1.5m, H: 1.6m
36

 Less length but more inner cabin space due to height. Comfortable leg room. Independent Front & Rear Suspension McPherson Strut in Front & Coil spring & trailing arm in rear. Better ride than Maruti 800. Single piece ribbed steel body with safety features such as crumple zones, intrusion resistant doors, seat belts, strong seats & anchorages. Safety requirements are adequately met. Single Wiper in place of two. Cost effective yet functionality is met Tube less Tires Weight reduced by 2 Kg. Cost reductions 200 Rs. And in line with modern vehicles Instrument console in the centre Elegant to look at and can be used both in Left Hand & Right hand version. The list goes on and on. The Final verdict
THE CAR COSTS Rs 1 lac Test Marketing And Commercialization Nano is soon going to launch by the end of April. It will be commercialized in whole of India. It is mostly targeted to the middle class and lower middle class people. The effects of Nano and its commercialization will be soon known after it comes into the market.

37

SOME MYTHS ABOUT NANO When Nano was introduced, it surprised everyone. It had so many features but the cost was as low as Rs. 1 lakh. This was really amazing. Due to this, many competitors, governments and others opposed Nano. Moreover, its not a new thing that whenever a new concept is developed, people oppose. They find more limitations then seeing the benefits. Following are some myths about Nano. But these are then proved to be wrong. Myth no #1

Nano is an unsafe car

The car has an all steel body. It meets the mandatory Frontal Impact requirements.
38

 It also meets the Side Impact requirements although they are not mandatory in India. Myth no #2

Nano will greatly increase the Pollution Level

The car is Bharat IV and Euro IV compliant although these norms, which are stricter than the present Bharat III norms, are yet to be introduced. It has lower carbon footprint, 20 mg / Km of Carbon Dioxide emission as compared to 45mg / Km, emitted by most of the two wheelers. Its Multi Port Fuel Injection system is controlled by an intelligent Bosch Engine Management system which controls the combustion cycle precisely to ensure compliance to all emission norms.

Myth no #3

Nano will struggle to perform

Although the car has 33 bops as the maximum horsepower it has a low kerb weight of 550 Kg and so has a higher power-to weight ratio when compared to many existing cars running on Indian roads. The car has a matching acceleration to Maruti 800 and also a good top speed. Although the manufacturers have estimated 90 Kms as the maximum speed the car can go up to 105 Kms per hour top speed. Myth no #4

Nano has very little leg room

39

 Although the car is 8% smaller than Maruti 800 it has lot of extra leg room at front as there is no engine compartment. This also leaves sufficient knee room at the rear. The car has a tall boy type design so there is lot of head space and also enough Shoulder room. The mono volume design and the wheels having been put at the corners have freed up lot of in- cabin space and although the car may be registered as a four-setter, three slim adults can sit comfortably at the rear.

Myth no #5

Cheap means Uncomfortable

More comfortable than some of the cars selling at even twice the price. Leaves sufficient knee room at the rear. Easy to get in & out of the car because of perfect seat height from the ground. Suspension systems are good and the trailing arms with coil springs are not found in cheap cars. Rear. Myth no #6

Its very difficult for a rear - engine car to work.

40

 Rear engines work in many cheap as well as expensive cars. Auto-rickshaws at one end and Formula One cars on the other extreme all use rear engines. Maruti Omni too has a rear engine, under the seat and no one has been burnt due to that. Cooling is easier in Nano as compared to some vans and there are the air ducts on either side behind the edge of the doors, which allow air to seep in for both cooling & for intake.

Myth no #7

There is a shortage of storage space.

There is some storage space although not much. The rear seat with parcel shelf folds to allow accommodating a large suitcase. Small articles can be placed under the bonnet also.

Myth no #8
41

Cutting Corners is evident everywhere

Cost cutting is done by smart designing rather than taking out the essentials. One wiper has been taken out but the functionality is intact. Wind shield washer fluid jets are mounted on the wiper itself rather than the body. Wheels are held by three bolts instead of four. On the contrary, MRF tubeless tyres and all Alumininium engine, have been used, which are more expensive than conventional ones.

CHAPTER 2

42

LITERATURE REVIEW

43

Literature review
1.CONSUMER RESEARCH IN DIFFERENT DISCIPLINES: A considerable body of literature in a range of different disciple lines exists on consumption, consumer behavior, and consumer decision-making process. Research in economics, business, marketing, psychology and sociology domains studies consumer behavior from different theoretical premises: for economists, consumption is used to produce utility; for sociologists, it is a means of stratification; for anthropologists a matter of ritual and symbol; for psychologists the means to satisfy or express physiological and emotional needs; and for business, it is a way of making money(Fine 1997). For more than a decade now, a range of studies that address environmentally sound consumer behavior, e.g. car use, waste sorting, minimization and recycling practices, have been conducted. However, few studies evaluated consumer acceptance of the PSS concept a consumption based on non-ownership of physical products, see, for example, studies on car sharing schemes (Schrader 1999; Meijkamp 2000), ski rental and washing services (Herschel ,Konrad et al. 2001). One reason explaining the lack of studies in the area could be that, there are still not many PSS schemes in place to serve as test grounds. Another reason could be uniformity of research focus. Most of consumer research focused on adopter categories, habits, attitudes and intentions, rather than on actually measuring the satisfaction level with the service. The reason is probably that PSS ideas have been promoted by researchers from the environmental management, marketing, design, and engineering fields, and to a lesser extent by sociologists, who hold the banner of research in customer satisfaction. 2. CONSUMER SATISFACTION PROCESS : The paramount goal of marketing is to understand the consumer and to influence buying behavior. One of the main perspectives of the consume r behavior research analyses buying behavior from the so-called information processing perspective" (Holbrook and Hirschman

44

1982). According to the model, customer decision-making process comprises a need satisfying behavior and a wide range of motivating and influencing factors. The process can be depicted in the following steps (Engel, Blackwell et al. 1995): Need recognition realization of the difference between desired situation and the current situation that serves as a trigger for the entire consumption process. Search for information - search for data relevant for the purchasing decision, both from internal sources (one's memory) and/or external sources. Pre-purchase alternative evaluation - assessment of available choices that can fulfill the realized need by evaluating benefits they may deliver and reduction of the number of options to the one (or several) preferred. Purchase - acquirement of the chosen option of product or service. Consumption - utilization of the procured option. Post-purchase alternative re-evaluation - assessment of whether or not and to what degree the consumption of the alternative produced satisfaction. Divestment - disposal of the unconsumed product or its remnants. Besides the information processing perspective, marketing analyses consumer behavior by employing a psychologically grounded concept of attitudes (Balderjahn 1988; Rosin, Yates et al. 1989; Lazar and Crosse 1998). It is consumer attitudes that are usually named as the major factor in shaping consumer behavior and a wealth of studies is available on the topic of how attitudes can predict behavior.

3. WHY CUSTOMER SATISFACTION IS SO IMPORTANT :

45

It seems self evident that companies should try to satisfy their customers. Satisfied customers usually return and buy more, they tell other people about their experiences, and they may well pay a premium for the privilege of doing business with a supplier they trust. Statistics are bandied around that suggest that the cost of keeping a customer is only one tenth of winning a new one. Therefore, when we win a customer, we should hang on to them. Why is it that we can think of more examples of companies failing to satisfy us rather than when we have been satisfied? There could be a number of reasons for this. When we buy a product or service, we expect it to be right. We dont jump up and down with glee saying isnt it wonderful, it actually worked. That is what we paid our money for. Add to this our world of ever exacting standards. We now have products available to us that would astound our great grandparents and yet we quickly become used to them. The bar is getting higher and higher. At the same time our lives are ever more complicated with higher stress levels. Delighting customers and achieving high customer satisfaction scores in this environment is ever more difficult. And even if your customers are completely satisfied with your product or service, significant chunks of them could leave you and start doing business with your competition. A market trader has a continuous finger on the pulse of customer satisfaction. Direct contact with customers indicates what he is doing right or where he is going wrong. Such informal feedback is valuable in any company but hard to form allies and control in anything much larger than a corner shop. For this reason surveys are necessary to measure and track customer satisfaction. Developing a customer satisfaction programmer is not just about carrying out a survey. Surveys provide the reading that shows where attention is required but in many respects, this is the easy part. Very often, major long lasting improvements need a fundamental transformation in the company, probably involving training of the staff, possibly involving cultural change. The result should be financially beneficial with less customer churn, higher market shares, premium prices, stronger brands and reputation, and happier staff. However, there is a price to pay for these improvements. Costs will be incurred in the market research survey. Time will be spent working out an action plan. Training may well be required to improve the customer service. The implications of customer satisfaction surveys go far beyond the survey itself and will only be successful if fully supported by the echelons of senior management.

46

CHAPTER 3

OBJECTIVES

47

Following are the objectives of the project:-

To find the marketing techniques of Tata NANO Finding out the marketing techniques which were successful in bringing out the worlds cheapest car into the market, is the main objective of the project. To study the brand awareness The brand awareness that Tata Co. successfully created among the general public with the help of different media, is to be studied. To know the secret behind its popularity Finding the secret behind NANOs immense popularity is to be given emphasis on. To study the cost reduction techniques It is to be thoroughly studied as to how the company managed to reduce the cost of production of the car and bring down the market sales price to just Rs.1 lakh. To check its awareness among general public using questionnaires The awareness of the product among the general public is to be checked, in order to find out the intensity of its popularity.

To analyze what makes NANO different from its competitors Comparisons are to be made with the cars competitors in order to find out its edge over them.

48

CHAPTER 4

RESEARCH METHODOLOGY

49

Research methodology
1. Problem statement: objectives and the purpose of the study: To understand the customer satisfaction levels of TATA NANO. To know the Features and the benefits of the car add to high customer satisfaction. To know the Features and the benefits of the car that is not considered as important factor for customer satisfaction. To know people perception towards NANO available in the market. Significance of the study: To gain insights whether the product delivers what it promises 1. Variables under study: Dependent variable: customer satisfaction Independent variables: Price , After Sales Service, Availability of Service Stations, Maintenance Cost, Comfort, Design and Dimensions, Fuel Options, Safety Features, Luggage Space, Mileage, Engine Performance, Leg Space, Warranty, Engine Sound ,Resale Value, Accessories Quality, Individual Satisfaction Level 1. Research hypothesis: Customer Satisfaction of Tata Nano Customers: H1: Customers satisfied with Tata Nano Factors Influencing Customer Satisfaction: H1: Price plays an important role in customer satisfaction (CS) H2: There is a strong relationship between CS and after sales service H3: There is a strong relationship between CS and availability of service stations H4: There is a strong relationship between CS and maintenance cost
50

H5: There is a strong relationship between CS and comfort H6: There is a strong relationship between CS and Fuel Options H7: There is a strong relationship between CS and Safety Features H8: There is a strong relationship between CS and Luggage Space H9: There is a strong relationship between CS and mileage H10: There is a strong relationship between CS and Engine Performance H11: There is a strong relationship between CS and warranty H12 : There is a strong relationship between CS and leg space H13: There is a strong relationship between CS and Engine Sound H14: There is a strong relationship between CS and Re-sale Value H15: There is a strong relationship between CS and Accessory Quality

51

2. Research design:
Research Classification: Descriptive Data Collection Technique: Primary Research Population: All Tata Nano Users in Lucknow Sample Size: 20 Sampling Method: Random Convenient Sampling Data Collection Tool: Structured Questionnaire (17)

52

CHAPTER 5

DATA ANALYSIS

53

Why you bought NANO car?

70% people bought nano car because of cheap car 10% people bought Nano car because of small car 5% people bought Nano only for easy to drive 5% people bought Nano only availability of 0% finance 0% people bought Nano because of easy to parking 5% people bought Nano because of more mileage 5% people bought Nano due to more exciting colors

0% for sporty look

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2.Instead of purchasing a bike, will you prefer to go for NANO?

40% yes 50% no 10% cant say

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BASIS

STRONGL Y SATISFAC TIED

SATISF IED

NEUTR AL

DISSATIS FIED

STRONGL Y DISSATIS FIED 10%

ENGINE POWER RPM A/C SAFETY BODY COLOUR NOISE OF THE CAR GROUND 80% LEARENC E CAR SPACE INTERIO R 70% 20% 80%

40% 50%

40% 40% 60%

10% 10% 40% 20%

20% 20% 50%

40%

20%

10%

40%

20%

20% 20%

10% 40% 10% 10%

ENGINE POWER

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S AT IS F IE D

N E UT R AL

DIS S AT IS F I E D S T R O NGLY DIS S AT IS F I E D

RPM

S AT IS F IE D NE UT R AL D IS S AT IS F IE D

A/C

57

NE UT R AL D IS S AT IS F IE D

SAFETY

S lice 1 S AT IS F IE D N E UT R AL D IS S AT IS F IE D S T R O NGLY D IS S AT IS F IE D

BODY COLOUR

58

80% 70% 60% 50% 40% 30% 20% 10% 0% S T R ON GLY S AT IS F IE D S AT IS F IE D

B O DYCO LO UR

NOISE OF THE CAR

S AT IS F IE D N E UT R AL D IS S AT IS F IE D

4 .Which feature of NANO attracts you more, that inspires you to go for

NANO? PRICE 60%

DESIGN 10% MILEAGE 20% INTERIOR 0% ALLOF THE ABOVE 5%

59

 CANT SAY 5%
70 60 50 40 30 20 10 0 PR ICE DE S IGN MILE AGE INT E R IOR ALLAB O VE CAN'TS AY AT T R ACT

5 .Which color of NANO would you prefer? ( Pls tick)

a. Blue b. Red c. White d. Yellow e. Silver

40 35 30 25 20 15 10 5 0 B LUE R E D WHIT E

(10%) (20%) (20%) (40%) (10%)

CO LOUR

YE LLOW

S ILVE R

6 .Do you think NANO is the peoples car? a. Yes b. No c. Cant say (20%) (60%) (10%) 60

60 50 40 30 20 10 0 YE S NO CAN'TS AY PE O PLECAR

7. Which small car would you prefer to buy? a. Tata NANO b. Maruti 800 c. SNTRO d. INDICA e. ALTO f. Beat
30 25 20 15 10 5 0 NANO MAR UT I 800 S ANT R O INDICA ALT O B E AT S MALLCAR

(10%) (0%) (30%) (20%) (30%) (10%)

8. How long can you wait for NANO?

a. 1-2 months b. 2-4 months

(40%) (0%)
61

c. 4-6 months d. Cant wait

(20%) (40%)

9 .If the prices of NANO increases, would you still purchase it? a. Yes b. No c. Cant say (30%) (50%) (20%)

YE S NO CAN'TS AY

10 .Will you recommend NANO to your friends and relatives?

a. Yes b. No c. Cant say

(20%) (70%) (10%)

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YE S NO CAN 'TS AY

11.How a. b. c.

will you feel if NANO is used as a taxi? (100%) (0%) (0%)

Embarrass Dont care Cant say

12..Will there be traffic problem with the introduction of NANO on Indian roads? a. Yes b. No c. Cant say (0%) (100%) (0%)
63

13.Can you trust NANO for safety?

a. b. c.

Yes No Cant say

(10%) (90%) (0%)

64

CHAPTER 6

LIMITATIONS, SUGGESTIONS & BIBLIOGRAPHY

65

Limitations:1. Price Tata Nano in some extent is high.

2. Quality of interior in Tata Nano in some extent low. 3. Length of the car also not satisfactory. 4. Features comparison with other cars also not satisfactory. 5. Power steering is not available in all models of Tata Nano. 6. Engine of Tata Nano is in back or not covered completely. 7. Sound of the Tata Nano engine also loud in some extent. 8. Power windows only front two doors only in Tata Nano LX. 9. The Tata Nano Engine is of 624cc so the mileage should be 30 plus. 10. Front tiers are opposite to the back tiers front of 135/70, rear 155/65. 11. Not compatible in long drive. 12. Desk box should be in build in Tata Nano interior.

66

SUGGESTION:-

1. Length of the Tata Nano car should increase from front. 2. Tata Nano should with some extra feature. 3. Tata Nano engine Sound should be reducing. 4. Price of Tata Nano should reduce in some extent to increase the sale. 5. A/c of Tata Nano should be more effective. 6. The Tata Nano Demand increased by some attractive offers and schemes. 7. Front and rear tiers size should be same. 8. The window for boot space should be open from back.

67

Bibliography:1. www.tatamotors.com 2. tatanano.inservices.tatamotors.com 3. www.gaadi .com 4. Field survey. 5. The Tata Nano brochure.

68

QUESTIONNAIRE ON TATA NANO

1. What is the first thing that comes to your mind, when you think about NANO?
........................................................................................................................... ......... . .

2. Why you bought NANO car? ( Pls tick)

a. Cheap car b. Small car c. Easy to drive d. Finance is available at 0% e. Easy to parking f. More mileage in petrol g. More colour
h. Sporty look

() () () () () () ()
()

3.

Instead of purchasing a bike, will you prefer to go for NANO? ( Plz tick) a. Yes b. No () ()
69

c. cant say

()

4. Which feature of NANO attracts you more, that inspires you to go for NANO? ( Pls tick) a. Price b. Design c. Mileage d. Interior space e. All of the above f. Cant say () () () () () ()

5. Which color of NANO would you prefer? ( Pls tick) f. Blue () () () () ()

g. Red h. White i. Yellow j. Silver k. Other, specify........................

6. Do you think NANO is the peoples car? ( Pls tick) d. Yes e. No f. Cant say () () ()
70

7. Which small car would you prefer to buy? ( Pls tick) g. Tata NANO h. Maruti 800 i. SNTRO j. INDICA k. ALTO l. Beat () () () () () ()

8.

How long can you wait for NANO? ( Pls tick) e. 1-2 months f. 2-4 months g. 4-6 months h. Cant wait () () () ()

9. If the prices of NANO increases, would you still purchase it? ( Pls tick) d. Yes e. No f. Cant say () () ()

10. Will you recommend NANO to your friends and relatives? ( Pls tick)
71

d. Yes e. No f. Cant say

() () ()

11. How will you feel if NANO is used as a taxi? ( Pls tick)
d. e. f.

Embarrass Dont care Cant say

() () ()

12. .Will there be traffic problem with the introduction of NANO on Indian roads? ( Pls tick) d. Yes e. No f. Cant say () () ()

13. Can you trust NANO for safety? ( Pls tick)

d. e. f.

Yes No Cant say

() () ()

14. Give your suggestion to improve Nano car? If any

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.............................................................................................................. ........................
..

(SIGNATURE)

73