RESEARCH PROJECT
SUBMITTED BY
JOHNNY PRINCE D
(08BSHYD0324)
SUBMITTED TO
ASST. PROF. Y. MALINI REDDY
TABLE OF CONTENTS
LIST OF TABLES .............................................................................................................................................. 3
LIST OF FIGURES ............................................................................................................................................ 3
SYNOPSIS ....................................................................................................................................................... 5
1. INTRODUCTION ..................................................................................................................................... 6
1.1. INDIAN AUTOMOBILE INDUSTRY .................................................................................................. 7
1.2. ABOUT TATA MOTORS .................................................................................................................. 9
1.3. PRODUCT STUDY ......................................................................................................................... 11
2. MAIN TEXT .......................................................................................................................................... 14
2.1 PROJECT OBJECTIVE .................................................................................................................... 15
2.2 METHODOLOGY .......................................................................................................................... 15
2.3 SCOPE OF THE PROJECT .............................................................................................................. 16
2.4 LIMITATION OF STUDY ................................................................................................................ 17
2.5 JOURNAL REVIEWS ...................................................................................................................... 17
2.6 PERIODICAL REVIEWS.................................................................................................................. 26
2.7 GAPS IN THE LITERATURE ........................................................................................................... 32
2.8 REVIEW ABOUT TATA NANO ....................................................................................................... 33
3. QUESTIONNAIRE DESIGNING AND PILOT STUDY ................................................................................ 36
3.1 QUESTIONNAIRE DEVELOPMENT................................................................................................ 37
3.2 PILOT STUDY FINDINGS ............................................................................................................... 38
3.3 SAMPLING FRAME....................................................................................................................... 44
4. ANALYSIS AND INTERPRETATION ........................................................................................................ 45
4.1 PRELIMINARY DATA ANALYSIS .................................................................................................... 46
4.2 CROSS TABULATION ANALYSIS.................................................................................................... 54
4.3 FACTOR ANALYSIS ....................................................................................................................... 56
4.4 CORRESPONDENCE ANALYSIS ..................................................................................................... 62
4.5 MULTI DIMENSIONAL SCALING: .................................................................................................. 63
4.6 FINDINGS AND RECOMMENDATIONS ......................................................................................... 66
5. CONCLUSION, REFERENCES AND ANNEXURE ..................................................................................... 67
CONCLUSION ............................................................................................................................................... 68
REFERENCES ................................................................................................................................................ 69
LIST OF TABLES
Table 1 Passenger Vehicle Market ................................................................................................................ 8
Table 2 Tata Motors Story Line ................................................................................................................... 10
Table 3 Regression coefficients effect in sub market ................................................................................. 20
Table 4 Sub Constructs’ terminology ........................................................................................................ 25
Table 5 Literature Gap Table....................................................................................................................... 33
Table 6 Nano with its competitors .............................................................................................................. 35
Table 7 Design of questionnaire ................................................................................................................. 38
Table 8 KMO Test - Pilot Survey Analysis .................................................................................................... 39
Table 9 Total Variance Explained Pilot survey analysis ............................................................................... 40
Table 10 Rotated Component Matrix - Pilot survey analysis ...................................................................... 42
Table 11 Factor analysis statements - Pilot survey analysis ....................................................................... 44
Table 12 chi square test Tata Nano Preference Vs Age .............................................................................. 54
Table 13 chi square test Tata Nano Preference Vs Income ....................................................................... 55
Table 14 Table 13 chi square test Tata Nano Preference Vs Suggesting Tata Nano.................................. 55
Table 15 KMO Test - Factor analysis ........................................................................................................... 56
Table 16 Total variance Explained - Factor Analysis ................................................................................... 57
Table 17 Rotated Component Matrix - Factor Analysis .............................................................................. 59
Table 18 Factors Analysis Table .................................................................................................................. 61
LIST OF FIGURES
Figure 1 Domestic Passenger Vehicles Trend ------------------------------------------------------------------------------ 7
Figure 2 Constructs and their Relationships ------------------------------------------------------------------------------ 22
Figure 3 Constructs and the Sub-constructs in the consumer search process ----------------------------------- 23
Figure 6 Age of the respondents--------------------------------------------------------------------------------------------- 46
Figure 4 Age of the respondents--------------------------------------------------------------------------------------------- 46
Figure 5 Income Level of respondents ------------------------------------------------------------------------------------- 46
Figure 7 Car Owners break-up ----------------------------------------------------------------------------------------------- 46
In this project the „Customer Adoption Process of a New Product – A study on Tata Nano, we try
to understand the efforts gone into the development of a New Product for the customers. The
company states that it has been able to deliver 17,357 cars as on December 2009 of the one lakh
customers who have been selected in the first-run for Nano. The company plans to boost up its
manufacturing of Nano so that it could complete the delivery of the remaining cars by March
2010. The Automobile Plant at Sanand would become operational from this year and the
company is planning to come up with a model with additional features and higher price in
addition to the existing Nano. The market response to Nano has been studied in this project by
surveying the respondents who possess/Plan to buy/Do not intend to have Nano. The suggestions
mentioned in the report, if implemented, may increase the customer preference towards Tata
Nano.
Automobile Industry had been hailed as the „Industry of Industries‟ by Peter Drucker-
rightly been called so. The automobile Industry has evolved continuously with changing times
from craft production in 1890s to mass production in 1910s to lean production techniques in the
1970s. The auto giants had battled the World Wars, the downfall of economies and mastered the
aspects of Quality, Delivery, and Innovative product development. The automobile industry in
India is the ninth largest in the world with an annual production of over 2.3 million units (2008).
In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South
Korea and Thailand1. The automotive industry in India grew at a computed annual growth rate
(CAGR) of 11.5%2 over the past five years,. The industry has a strong accelerating effect on the
economy due to its deep forward and backward linkages with several key segments of the
economy. The automobile industry, which was plagued by the economic downturn amidst a
credit crisis, managed a growth of 0.7 % (2008-09) with passenger car sales registering 1.31
percent growth while the commercial vehicles segment slumped 21.7%.
1
Automobile Industry in India - http://en.wikipedia.org/wiki/Automobile_industry_in_India
2
According to Economic Survey for 2008-09
The industry leader is Maruti Udyog with 46 per cent market share, followed by Tata
Motors and Hyundai Motors. India is considered as a strategic market by Suzuki, Japan, a co-
promoter of Maruti Udyog. Hyundai Motors, the third largest passenger vehicle manufacturer in
India, has established its global manufacturing base for small cars in India and is a leading
exporter of small cars from the country. Other major players are Toyota, Honda Motors and
Ford, all of these are operating in the premium cars segment.
3
Source - SIAM
Tata Motors Limited is India's largest automobile company, with consolidated revenues
of INR.70,938.85 crores (USD 14 billion) in 2008-09. It is Market Leader in commercial
vehicles in each segment, and among the top three in passenger vehicles .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”. The various
milestones are listed below.
YEAR MILESTONE4
1945 Tata Engineering and Locomotive Co. Ltd.(Telco) was established to manufacture
locomotives and other engineering products.
2000-2002 Indica with Bharat Stage 2 (Euro II) compliant diesel engine launched.
Indica 2000 (Euro II) with multi point fuel injection petrol engine launched.
Launch of CNG buses.
Indica V2 launched - 2nd generation Indica.
100,000th Indica wheeled out. (2001)
Launch of the Tata Safari EX
4
Obtained from Tata Motors official website - http://www.tatamotors.com/our_world/rearview.php?version=text
2003-2005 Tata Motors unveils new product range at Auto Expo '04.
Tata Motors completes acquisition of Daewoo Commercial Vehicle Company
Tata Daewoo Commercial Vehicle Co. Ltd. (TDCV) launches the heavy duty truck
'NOVUS' , in Korea
Sumo Victa launched.
Tata ACE - India‟s first Mini-truck launched.
Tata Motors lists on the NYSE.
Tata Motors wins JRD QV award for business excellence.
Tata Motors launches Indica V2 Turbo Diesel.
2006-2007 Construction of Small Car plant at Singur, West Bengal, begins on January 21
Tata Motors vehicle sales in India cross four million mark
Tata Motors and Fiat Group announce three additional cooperation agreements
Tata Motors introduces a new Indigo range
Roll out of 100,000th Ace
Tata Motors launches Indica V2 Turbo with dual airbags and ABS
Tata Motors' presence indeed cuts across the length and breadth of India with over four
million Tata vehicles ply on Indian roads. 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 powertrains. . Tata Motors also distributes and
markets Fiat branded cars in India. The company is establishing a new plant at Sanand
(Gujarat) for Production of Tata Nano. The company's dealership, sales, services and spare
parts network comprises over 3500 touch points.
The Tata Nano has been the most expected car in the automobile history and it might well
become the most important milestone to mark a beginning in the budget-cars segment. On
January 2008 at Delhi Exhibition, there were two cars of Tata Nano that were displayed. One
was the prototype and other with the cars‟ innards exposed. The mission of building Nano
began way back in 2003 when Mr. Ratan Naval Tata, Chairman of the Tata Motors set a
challenge to provide People‟s car and now it has transformed into a reality. Thanks to the
dedicated team of Engineers and the R&D who had spent sleepless nights to come up with
this wonder car. There were three clear requirements given by TATA Motors to its
engineering team.
Firstly, the vehicle should be of low cost. Secondly, the vehicle has to ensure to the
regulatory requirements and finally, the vehicle should achieve the performance targets such
as fuel efficiency and Power. Initially the Design Team came up with a vehicle that looked
more like a quadric-cycle. The design team was clearly stated that the innovative vehicle that
they build should not be perceived by the consumers as an upgraded scooter on four wheels
or anything flimsy or cheap looking product5.
As rightly said my Ratan Tata himself, it is a great innovation, because innovation is all
about thinking of the next decade and not the next quarter. The Tata Nano will certainly find
big takers in India. The Tata Nano development can be attributed to innovation inside and
outside the Organization. For instance, the regular suppliers of Tata Motors were called upon
and emphasized the need of cost-cutting whereby they can improve upon their bottom-line
and at the same time contribute to the success of Tata Nano. Rane Group, for instance, which
makes the rack and pinion steering system focused on the reducing the weight of the
materials by using steel rod instead of Iron.
Similarly in terms of the selection of engine also initially the engineers experimented
with the existing engines. But since they were unsuitable, the team decided to build its own
5
Stated by Mr. Ravi Kant – Chief Executive, TATA Motors.
This has also led the competitors pitching in for their own People‟s car version. Mr. Venu
Srinivasan, M.D- TVS Motors states ‘It is a major breakthrough in the auto industry. In
terms of style, space and size, it is comparable to the small cars, but at an unbelievable
price‟. Mr. B. N. Kalyani, CMD Bharat Forge states ‘India should be proud of what he and
Tata Motors have done in spite of all the problems. It looks a very good product’. In one of
the Automobile Exhibitions held at Geneva, the CEOs of the global automobile industry
visited the stall where Tata Nano was displayed. Mr. Carlos Ghosn of Renault-Nissan and
Mr. Rick Wagoner of General Motors were prominent among them. ‘.. This is really
fantastic. This is what we should try and achieve’ exclaimed Mr Ghosn. ‘.. This is a
benchmark kind of Model. You Indians always make us think‟ commented Mr. Wagoner. The
second largest two-wheeler manufacturer, Bajaj Auto has promised to come out with its
version by 2011. Ford India has allotted INR 2000 crores to set up a small car manufacturing
facility in India. Other giants like Renault, Nissan, Volkswagen, Skoda and Fiat are in the
race to build low cost cars.
There are huge array of activities carried out by an organization in order to make the new
product acceptable to the market. All new products launched do not guarantee success in the
market. Though there is a need in the market for a particular product, the way the product is
launched taking into consideration even the finer details of the product is crucial for the
6
Figure from Tata Sources - http://www.indiasummary.com/2009/06/24/tata-nano-booking-tata-nano-draw-
complete-check-your-booking-status/
Hence by choosing a Product that has indeed been our National Pride, It would give me
better insights of Marketing a New Product. Through this Project, I wish to study the efforts
taken by the company in terms of creating the awareness about Tata Nano, enabling
customers buy Nano. Secondly the factors customers perceive towards buying behavior
towards such a car could be studied. There could be a gap between the customers‟
expectations in terms of Price, Features, Physical appearance, Performance etc. and the
reality that is available in Nano. So understanding the expectations may help suggest the gap-
narrowing efforts thus increasing in customer preference to Tata Nano. The research may
help understand the customer preferences, dealers’ view point and the Company‟s
Objectives. The recommendations might be beneficial to TATA Motors to strengthen its
position in the Automobile Market through Nano. For companies that follow TATA by
launching low-price car,
Learnings from Tata Nano may help them fine tune their approach in the launch of a New
Product in the market. Some of the questions that would be answered towards the end of the
research could be How successful Nano had been in converting the Two-wheeler customers
to buy Nano cars?‟, ‟How successful Nano had been in enabling the already car owners buy
Nano?‟, „Has the restriction in the Price created a dent in the product features for the
consumers?‟,‟ How would Nano counter the Micro and Macro-factors?‟, ‟Could the problem
in the timely delivery of the vehicle result in cancelling of Orders?‟ , „Does the car guarantee
safety-affordability-performance for any person who buys it?‟.
7
Edsel was launched with much hype in 1957, Unfortunately the car did not live up to the high expectations. The
design of the front grill was compared to 'an oldsmobile sucking a lemon,' and 'a toilet seat' that turned off
consumers.
8
In early 80’s,to remain in number 1 spot, Coke executives decided to cease the production of the conventional
Coke over New Coke. The public outrage made Coca-Cola to re-launch its original formula
To study the various activities the company is involved prior to launch of its New
Product and various stages in the Customer Adoption Process.
To examine the core factors that influence customers towards buying TATA Nano.
2.2 METHODOLOGY
The Preliminary stage (that has been completed) dealt with identifying the objectives of the
project, and checking the feasibility of the Project. By discussing with the Faculty Guide, the
Project Objectives were finalized. The duration for the completion of the Project and the Project
Proposal has been drafted in this stage. The first stage will comprise of the product study –The
Marketing Mix of TATA Nano in terms of Product Features, Pricing, Promotion mode/Tools
used, distribution channels, trade and Promotional offers associated with the Tata Nano. Based
on the Product Study using various tools like the Porters five-force model, the SWOT analysis,
the PESTL the analysis of TATA Nano‟s launch, would be worked out.
The Research is being done to address the second objective of Studying of customer preference
towards buying a Tata Nano car. This research falls in the category of Exploratory Research as
we do not have a prior knowledge about the product and the customer preferences. Based on the
information derived from this further probing can be done. The Sampling method would be
convenience sampling (a non-probability sampling method) as the selection of units from the
population is based on the availability of the respondents. The sampling frame consists of the
visitors to the Tata Motors showrooms as they are looking forward to buying a Car or already
purchase Tata Nano.
The data collection is by using the questionnaire. Two questionnaires rough draft have been
designed [included in the annexure III] one for the Customer Responses sheet. A pilot test with
the customer questionnaire would be done with the students available in the campus with a small
sample size of 10-15 respondents. Based on the data obtained, after modification of the
questionnaire (if needed) the data collection process would start. The expected sample size is
Post data collection, we would perform analysis using the statistical tool SPSS. With the data
available, primarily we run a frequency cross-tabulation to find the dependence of various factors
based on Income levels, age level and preferences. A perceptual Map using Multi Dimensional
Scaling could be performed on the customer questionnaire to study the mental map in the minds
of the customers towards different cars. This could give a picture as in where Tata Nano lies vis-
à-vis other cars in the market. Subsequently we would run a factor analysis to list down the core
factors that would influence the buying behavior of Tata Nano. Thus the recommendations
would be suggesting ways to improve the sales of Tata Nano.
The study or analysis would be done based on the respondents in Hyderabad. Hence the
research findings are specific to this place and cannot be extrapolated.
The Car Owners or the customers who are interested in buying Cars would be in our
sample. Hence we are not considering the group who is not interested in buying Cars.
9
Number arrived based on the sub-questions available for factor analysis
10
Reliability Analysis is done to ensure the reliability of the data collected. The customer questionnaire is designed
in such a manner to ensure that the responses yield consistent results
The research project and inference is specific to the city of Hyderabad. Hence the
findings cannot be extrapolated.
Due to the fewer Tata Nano dealers available in Hyderabad, it may lead to a smaller
sample size.
Review I
Emerald Group Publishing Limited, STRATEGIC DIRECTION, „THE CARS THAT ATE THE
SELLING TO THE BOTTOM OF THE PYRAMID – The Case of Tata Nano’ (VOL. 25 NO. 6
2009) pp. 10-12
INTRODUCTION: The article explains about how Tata Motors had been instrumental in
realizing the term „Fortune at the Bottom of the Pyramid11” by launching Tata Nano to the poor
living in low-end and middle-income countries. Normally the bottom of the pyramid has
abundant scope for the Multi National Companies because of the large population base with
pending demand, minimal consumer expectations and hardly any competition. The article tries to
explain Tata Nano in terms of Transactional Marketing elements – Product; Price; Promotion
and Place.
LEARNING: The Tata Nano may not be affordable car for the Poorest, but it could cater the
unfulfilled needs of those within the bottom of the pyramid who could afford to buy a
motorcycle but could not buy a car. The normal household spends 2.5% of the expenditure on
transportation. Out of that 71% of the transportation expenditure is derived from the Bottom of
the Pyramid. Tata Motors believed that the market Potential of the car industry in India is much
more than 1.7 to 2 million units per year. The company looked at the 6 million units of two and
11
Used by Economist Dr. C.K. Prahalad to refer to the four billion people who earn less than $2 per day.
The Transactional Marketing covers various P‟s of Marketing – Product, Price, Place and
Promotion. The Product Tata Nano can be considered as a safe, affordable all weather form of
transport for a small family. The target customers of Tata Nano are the two and three wheelers in
addition to the already four wheeler segment. The safety factor was given high priority and the
vehicle conformed to Indian and European Standards and had passed the frontal crash test
required in India and the Offset and side crash tests required internationally. The Price control
had been ensured to make sure that the burden does not get shifted to the consumers.
The Steel prices had increased during the designing of the Nano. Hence to keep the price
low, the car size was compacted. The engine has proved to be fuel efficient at 50 miles per gallon
which is better than the small cars in Europe. Promotion has not been done much in case of
Nano. All the awareness consumers get is through the Press. Tata Nano can also boast of coming
from a family that is one of the finest business houses in the world with products ranging from
tea to chemicals to communication services to consultancy solutions. So the customers could
associate Tata‟s brand value to that of Nano. The Distribution being followed for Tata Nano is
Open Distribution wherein the manufacture of individual units happens at a different place and
assembling happens at a place close to the selling location. In this way the Operating Cost is
minimized.
CONCLUSION: Tata motors believed in achieving what it dreamt of and thus Nano is real. The
low production costs were achieved by using less and cheaper materials. Nano stands testimony
to the fact that low cost products can be developed without compromising on the quality and the
safety. The Innovated product development enabled Tata to obtain cost advantage. Also by
effective distribution network by encouraging local assembly units, the Tatas were able to
eliminate one level distribution chain and the benefit finally reaches the consumer.
JAMES WETZEL, GEORGE HOFFER, Journal Of Consumer Research (Vol 9, Sept 1982),
Consumer Demand for Automobiles: A Disaggregated Market Approach., Pages 195-199
INTRODUCTION: The paper studies the customer demand equations for several size
categories of domestic and imported automobiles in the U.S. Market in the early 80‟s. The level
of effect of changing motor fuel prices on the impact of the purchasing has been observed. The
factors affecting the demand such has been studied based on the Disaggregated Model12. To
understand these aspects statistically, using three-stage Least Squares13 (3SLS) technique, the
quarterly Demand and Supply models had been used.
STUDY: The base of the Disaggregate model is derived from the Standard economic Models of
consume choice and the theory of the firm. Consumers are considered to be the Utility
maximizers -who wish to gain utility on the purchase of any car. The Automobile firms are
considered to be the Profit maximizers –who wish to sell their units in maximum profit. Now
these two maximization principles result in the price setting and the output that in turn result in
the demand and supply conditions in each sub-market14. As per the Demand Equations, the
Demand for the ith segment is given by Di = f(Pi,Ps,Pc,E,F) where, Pi is the Price of the
automobile, Ps is the Price of the Substitutes, Pc is the Price of the Complements like in Motor
fuel, E refers to the Measures of the economic environment and F refers to the Other Factors.
Similarly from the Supply side Si= f(Pi,Pa,T) where Pi is the Price factor, Pa is the vector of
prices corresponding to the input prices and T being the level of technology. Normally most of
the models take Single equations, but as the model is disaggregate in nature, there has been a role
of both supply and demand forces in determining the number of units sold and the pricing for
that aspect. The measure of Income has been derived from the Michigan Survey Index of
Consumer Sentiment. The demand for automobiles is seasonal. Sensing this only most of the
12
Disaggregation refers to modelling in which some component is divided into a number of parts. For example A
population may be divided into age-classes or an area may be divided into subareas or a single “vegetation”
component may be divided into the separate species.
13
3SLS obtains three stage least squares estimates on a set of nonlinear equations. Three stage least squares
estimates are obtained by first estimating a set of nonlinear (or linear) equations with cross-equation constraints
imposed.
14
The paper considers US market into four categories – Standards, Intermediates, Compacts and Imports.
Standard - + + + - - + + + -
Intermediate - + + + - - + + + -
Compact - + + + + + + + -
Import - + + + + + + + -
Table 3 Regression coefficients effect in sub market
The Gasoline Price would be expected to be in negative in the larger domestic markets and
positive in the smaller in the smaller markets (Compact and Import).
In terms of the impact of these variables in the demand functions, the Price, consumer sentiment,
motor fuel prices and the seasonal factor were significant. An important observation being made
is that the motor fuel price coefficient had been negative during the price change. Thereafter one
quarter, the coefficient becomes positive.
15
It has been taken from US Bureau of Labor Statistics 1966-1976.
16
Obtained from the Bank of Japan Annual Volumes.
17
Yt : Disposable personal Income in constant dollars in period t
18
Yt-1: Disposable personal Income in constant dollars in period t-1
19
Gt Index for Price of Gasoline
CONCLUSION: The article has tried to explain how each submarket is different in terms of the
variables used in the demand and supply equations. The Price elasticity of demand was greater
than one for each submarket which means that the demand is sensitive to the price changes. The
small car sales would grow as the demographic changes continue to grow further thus companies
that were operating in the developed market has to shift its focus in the developing market
because of this reason.
Review III
GIRISH N. PUNJ, RICHARD STAELIN Journal Of Consumer Research (Vol 9, Sept 1983), A
Model of Consumer Information Search Behavior for New Automobiles., Pages 366-379
STUDY: The Model for the Information Search is given from the diagram below. The
positive(+) indicates that there is a direct relationship between the two variables. For eg. Cost
Savings (Y8*) is directly related to the Satisfaction (Y9*). Similarly the cost of external search is
inversely related to the Amount of External Information search.
Generally the amount of External Information Search is dependent on the time spent to
obtain the information and the Quality of Information obtained from other sources like friends,
book and magazine articles on automobiles, sales persons at dealerships and actual experience
test driving new automobiles by all participating member of the family. The internal search
refers to scanning the internal memory and that is dependent on the amount of prior knowledge
associated with the available alternatives and the other relevant information available in the
memory that helps a consumer process newly acquired information. In case the customer obtains
more information prior to the active search, the less the need for external search and vice versa.
The two dimensions of the knowledge is explained in the model - the quantity of directly
relevant information and the consumer‟s ability to comprehend new information. The first
dimension
Usable Prior Information refers to elements like the dealer information, model specific
knowledge. The Prior Memory Structure attempts to capture the consumer‟s knowledge of
buying as well as the knowledge associated with cars. The Cost of External Search is defined as
a sum total of all direct and indirect costs incurred by all the members of the family. The size of
the feasible set tried to capture the tastes and the financial constraints. The information about the
cars within a product class is viewed as having benefit in and the desire to capture information is
recorded in Desire to Seek Information. The Effectiveness of the Search is a construct which
refers the consumer skills. Cost savings may be considered as the difference in the actual price
Out of the nine variables, the five variables Usable Prior Information, Prior Memory
Structure, Cost of External Search, Desire to Seek Information and Effectiveness of Search are
considered as Antecedent Variables. Now each of these antecedents are dependent on these sub
factors mentioned in the diagram below:
As seen from the diagram the Desire to Seek Information (Y3*) is dependent on the sub
constructs Total makes(X6) and Magazine Readership (X7). Both these sub constructs are
directly related to the Desire to Seek Information. Similarly for each of the antecedent variables
there are the sub constructs and the terms are explained in the table given in the next page.
For the variable Amount of External Information Search there have been five sub
variables that are considered. Total Hours1 (Number of hours spent by all participating members
of the household in deciding on the car to buy), Total Hours2 (About specific information search
activities), Dealer Hours (Time spent in dealership), Dealer Visits (Number of times the visit to
dealer shops has happened) and the Total Activities( Total number of information search
activities). The Cost Savings Factor explains the amount a person paid below the quoted price.
The size of Feasible set is determined by the Make of the model and its style combinations.
Out of 2381 respondents who were mailed the questionnaire, around 65% were willing to
fill-in the questionnaire. The data had been collected from three different cities in the United
States. There have been multiple response questions to check the accuracy of the respondent.
Based on the data obtained, various statistic tests like Chi-square, Anova and 3-SLS were
performed and various aspects were studied. The variables Usable prior Information and Prior
Memory Structure have been found to be statistically significant with high β values. The
Customers with good knowledge and prior car purchase experience were estimated to have
higher Prior Memory Structure.
The variables like cost of external search and Effectiveness of search were found to be
statistically insignificant. There has been a significant negative relationship between the costs of
search and the positive relationship between costs of search and the amount of search and
positive relationship between the amount of search and the positive relationship between the
CONCLUSION: The research findings help us understand the importance of the constructs
which has impact on the mode of the search the customer executes while purchasing the new
automobile. For instance, if a company could find ways to address the cost savings, then the
satisfaction level increase and the effectiveness of search can also be guaranteed. There may be
other important factors that might even influence the consumer search process that has not been
included. But out of the model developed with these constructs, the different aspects are
analyzed.
Review I
RAVI MARPHATIA (Feb 2008). Surveying the Scene., PaintIndia, Pages 61-64
INTRODUCTION: The article explains the Launch of Tata Nano – The design and functional
features of the four-wheeler, the impact that it can bring to the Business Environment.
LEARNING: The World came to know about the Smart Car by name Tata Nano on January
2008 during the Auto Expo when Tata Nano was awarded the Car of the Year Winner by a big
margin. The Press reporters from all over the world had lauded Nano for its appreciative Style,
Comfort, Sophistication, Speed, Technology, Design, Luxury and above all the price tag of one
lakh rupees. Nano‟s design features are two cylinders 523cc engine. The other important aspect
is the Lean design20 strategy that could maximize the performance and fuel efficiency. In terms
of the emission standards, Nano has got the lower pollution compared to the two wheeler
vehicles. Good Fuel efficiency ensures low carbon-di-oxide emissions. The fuel tank capacity is
30L and 4-speed Manual Gear shifting. Nano, if it could succeed with this model, it could be a
20
Best way to achieve excellence in the product design by focusing on elimination of non-value waste.
CONCLUSION: The Vision of Ratan Tata, when he saw the Families riding on the two
wheelers with the father driving the scooter, the young kid standing in front of him, behind him,
the wife holding a little baby led him to wonder whether one could conceive of a safe,
affordable, all weather mode of transport. But now it is in reality after Tata Motors engineers and
designers gave their best for about four years to realize this goal. There is been a mixed response
in terms of attracting foreign investments on the Nano Roll out especially from the West. There
have been articles from across the world acknowledging Tata for its product at affordable price.
But how much would that turn into business is for us to wait and see.
Review II
Market Watch Global Round-up (June 2009). Automakers need to address every link in the
Supply chain., Datamonitor, Pages 11,12
INTRODUCTION: The article speaks about the Finished Vehicle Logistics (FVLs) and the
importance of focusing on the Holistic approach to logistics. The downturn has necessitated the
automakers to think about nouveau ways of improving the efficiency and effectiveness in the
supply chain and distribution.
LEARNING: Tata Nano in India can be considered as a more as a breakthrough in the Product
distribution with the variable Pricing Model. The Company has come up with a unique „Modular
Design‟ for the vehicle thereby enabling to distribute as Complete-knock-down(CKD)21 kits to
be assembled and serviced by local assembly closer to consumers. This method was traditionally
followed for bicycles. The cost of transporting modular CKD kits made at the central plant
would be charged to the consumers directly. For instance, a customer buying a Tata Nano from
Mumbai would end up paying 11% more than from a customer from New Delhi. This approach
21
Complete Knock Down (CKD), is a complete kit needed to assemble a motor vehicle. The CKD concept enables
firms in developing countries to gain more expertise in a particular industry. The CKD Kit exporting company gains
new markets that may otherwise be closed.
CONCLUSION: Like Maruti-Suzuki has tied up with the seaports in Gujarat for transportation
of its vehicles to South India, Tata is expected to collaborate with Indian Railways to obtain full
purpose railcars for the Nano. With a lot of companies treating India as a cost-competitive
manufacturing hub, there could be great opportunities for the logistics providers to improve their
market positions by coming up with innovative products and services.
Review III
Media (7th May 2009). Small Cars drive India’s motor industry growth, Page 21.
INTRODUCTION: The article highlights the importance of the small cars in Indian market.
Generally the car buyers desire sense of exclusivity, trustworthiness and reliability. The opinion
of friends and relatives, test drive, cars seen on road are among the top influencers of customer
preference. The automobile sector hence shifts from the Customer satisfaction to Brand
positioning by adopting more products in the product lines.
LEARNING: The launch of Tata Nano has made the Tata Motors complete the pyramid of car
models. Now Tata Motors can boast of having cars from around 1.25 Lakhs to 25 Crores. In the
month of April the Indians were busy buying forms for the Tata Nano that was scheduled to be
launched in July. Thanks to the Government for announcing flexible loans for the purchase of
automobiles in February. This resulted in a sales jump of the sales vehicles to 24% for the same
month. According to Dilip Chenoy, Director General – Society of Automobile Manufacturers‟
“Small cars will continue to be the leading sub-segment and the growth will come from Small
towns and newer cities”. If we look at the mid-size and the luxury cars sales in January-February
CONCLUSION: Due to the launch of Nano, the consumers‟ expectations would focus on what
features the consumers would get for the particular price. There has been an increase in the TV
advertisements over the Newspaper ads because of the Car companies looking for growth outside
the urban centers.
Review IV
Business Week (18th March 2009). What can Tata’s Nano teach Detroit?
INTRODUCTION: To start with, the vision of Ratan Tata to build a ultra cheap car for the
market which could not afford the normal price cars turned things around. No other automakers
had any idea about targeting the unexplored segment. The Nano‟s launch is an example of Blue
ocean strategy. The two-page article mentions that there are many things that world auto
companies can learn from the Nano.
LEARNING; The Tata Motors when it unveiled the prototype of the Nano in January 2008, the
auto executives were taken by surprise at the engineering marvel. The reason for Nano‟s success
they found was due to the engineering and supply chain breakthroughs. Now the US auto
industry is struggling to survive with General Motors filed for bankruptcy. Tata Motors had
created a new market by launching Nano and that is the way Great companies are built – in the
new markets, not increasing market share in existing ones according to Mr. Vijay Govindarajan,
Chief Innovation consultant at General Electric. Normally the companies sit down to think and
formulate how to target the existing market. But Tata Motors fixed on the end price of the
product when delivered to the customer and planned everything from design, raw materials cost,
22
According to JD Power and Associates
23
Hatchback refers to an automobile design, containing a passenger cabin with an integrated cargo space that can
be accessed from behind the vehicle by a single, top-hinged tailgate or large flip-up window.
Review V
Auto Car India (April 2009). Cover Story: MISSION IMPOSSIBLE, Pages 66-77
INTRODUCTION: The cover story issue on the Tata Nano analyses the various technical
features/functions of Tata Nano and how far has it been able to satisfy the customers‟ preference
of a small car at affordable price. The article also covers what kind of additional features can be
added in the future as some kind of design improvements based on the customers‟ needs.
LEARNING; Nano looks to be a cute car and would definitely make anyone looking at it give a
second look. Nano has got with air inlets behind the rear doors and tightly formed rear section.
The bumper is meshed that allows for the fair amount of heat dissipation from the rear end of the
car. The front end houses a 135 section tyre and the rear end has larger size tyre (155 mm). This
variation in the height of the tyres is to give stability in motion and at rest. The unconventional
shape has made the Tata engineers use a combination of monocoque24 chassis and space frame
with supports from two long members and three cross-members to bear the moment of Inertia
24
Construction technique that supports structural load by using an object's external skin as opposed to using an
internal frame and it is used in Automobiles and Aircraft body for giving enough support
Nano clocks 60 kmph in 9.1 seconds while 800s are a second faster. When the wheels
reach the speed of 106 kmph there is an automatic warning light that glows indicating the driver
to slowdown. Nano is better in cities where there needs to be more of maneuverings than in
Highways wherein the vehicle might suffer overtaking trucks because of the restrictive 4-speed
gear system. Nano has a ground clearance of 180 mm and seems to be a good one to drive in the
worst of the roads. In the Power steering model, the car, at its low speed can make an incredible
turning radius of just eight metres.
CONCLUSION: Nano has definitely stood up to the expectations of the consumers who had
been searching for an affordable value for money car. The pros in the car are astonishing space
and comfort, brilliant fuel economy, solid and robust look. The hurdles seen by the customers
who have purchased are need for a five-speed box, Movable fixed rear glass and the fuel tank
capacity to be greater than 15 litres. This kind of improvements if implemented even at a higher
price, the customers would prefer buying the car.
Tata Nano – The People‟s car had been launched in three Variants – Nano CX, Nano LX and
Nano. The Gallery on Nano is available in Annexure I. The major highlights of Nano is listed
below:
The Warranty period for Nano is 18 months or 24,000 Kms. whichever is earlier for the
Vehicle
A Non- AC Standard version comes with an ex-factory price of Rs. one lakh and will cost
INR 1.23 Lakh in Delhi. An AC version would be priced at INR 1.48 Lakh in Delhi
The sale of application forms and acceptance of bookings went from 9th April to 25th
April 2009.
For those who seek financing, Tata Motors has tie-ups with around 15 lending institutions
including State Bank of India.
MANAGEMENT RESEARCH PROJECT (DRAFT REPORT) Page 33
Total Booking that happened during the above mentioned period was 2.03 Lakh cars with
20% on Nano Standard, 30% on Nano CX and the rest for Nano LX.
The total booking was able to generate revenue of 2500 crores and out of that 70% has
been financed by lending institutions.
The Company has gone with Nationwide launch with distribution through its strong
dealer network
The existing Tata Motors Showrooms are being used to showcase Nano to the visitors.
Unlike New Product Promotion wherein the company has to invest huge amount on
promotional activities, for Nano the awareness was high as it was considered as a
National Pride.
The Car was showcased in various Auto Expos around the world to create a global buzz
about Nano.
There were regular Print Ads to remind the readers about Tata Nano. A few ads are
included in Annexure II.
The Design had to undergo the following considerations in order to achieve cost
advantage
New type of seats with Plastic Panels
Integrated Seat Rests Instrument Cluster located at the
No Radio, No passenger side centre with analog display
Mirror Two cylinder engine for lower cost
Rear Mounted Engine layout and better fuel efficiency
One wind shield wiper
An efficient usage of steel in the overall construction has resulted in reducing the
building costs.
The usual welding procedure is replaced by using a superior kind of glue.
The Fuel tank capacity is 15 litres. The dimensions and the other Specifications of Nano
is presented in Annexure II.
A comparison of Tata Nano with various other car models in terms of various features has been
explained below:
The following table can help us understand the purpose of the each question in the
questionnaire.
25
Question type refers to any of the Types : Lead-in, Qualifying, Specific, Demographic and Probing
As mentioned earlier a sample size of 30 was considered for the Pilot Study. The type of
sampling technique used for this process was convenient sampling wherein the majority of
the respondents were from our college. Henceforth, most of the respondents fall under the
category of first two age intervals. The results of the respondents are discussed below:
A Factor Analysis was performed to understand the buying preference for Tata Nano in the
customers‟ minds. Though factor analysis has to be done in case of large number of samples,
in this case we try to understand if the statements combine to give some meaningful
information based on the Pilot survey of 30 respondents.
The KMO Sampling Test of Adequacy (0.461) suggests that the pilot sample is marginally
less than 0.5 that is needed as a criterion for the sufficiency of observations. In our
questionnaire, there are 24 statements used. So during the Data Collection Procedure there
has to be atleast 125 to get appropriate results. Significance value for the Bartlett‟s test of
sphercity is below 0.05 hence we reject the null hypothesis and conclude that correlation
exists between the statements and factor analysis can be conducted.
Component
1 2 3 4 5 6
I would look at the Festival
Season/Offers provided for
.910
Tata Nano while planning
to buy.
The Price of the Car to fit
my budget is very important .898
to me while selecting a Car
Nano car has to be priced
between One and Two .896
lakhs.
I would look into the
Mileage of the car could .880
give while selecting a Car
From the Factor Analysis Output, we understand that the 24 statements can be classified into 7
Factors. Each Factor and the Combining Statements are mentioned below.
1 I would look at the Festival Season/Offers provided for Tata Nano while
planning to buy.
3 The Price of the Car to fit my budget is very important to me while selecting a
Car
5 I would look into the Mileage of the car could give while selecting a Car
6 I would look into the resale value of the Car after some time while selecting a
Value for Money
car.
7 I would look into the spare parts availability while selecting a car.
13 Nano satisfying the emission norms of Bharat Stage II and Stage III standards
are very important for me for selecting Nano
14 I would look into buying of car of Indian Make
17 The Brand Name associated with the Tata Nano is very high
Psychological Factors
24 I feel it is important for Nano to have inbuilt power steering Augmentative Factors
As seen from the table, the statement collate under different factor heads. Thus this could help us
in making some meaningful interpretations. In the next stage we could even do a conjoint
analysis to study the preference for different Attributes and different Attributes.
Apart from Factor Analysis, MDS can be performed based on the Rating given on different cars
as given in. Corresponding analysis the Perception in terms of the Attributes like Safety,
Affordability, Variety of models, After sales service, Comfort, Brand Image, Dealers,
Advertisements and Promotions can be studied.
For the Data Collection, a sample size of a Minimum of 125 is needed because of the
Factor Analysis involved. The respondents for the Survey would be the visitors to the Tata
Nano Show room, the respondents around that location. To understand the preference across
different age levels, good number of respondents from each age category has to be surveyed..
For the dealer survey, the following showrooms have to be visited in Hyderabad to
understand hear from Dealer point of view on Tata Nano
From the responses received from the questionnaire a preliminary analysis (qualitative) is done
in which has been presented below.
46% 36%
Figure 46 Age
Figure Age of
of the
the respondents
respondents Figure 5 Income Level of respondents
Out of the 107 respondents being surveyed there are a good number (almost 75%) belonging to
the age group of below 35 years. The Income levels of less than 3 Lakh per annum has almost
40% of the respondents followed by the next income level. These respondents can be converted
to Nano Buyers.
Yes
84% 69%
Yes No
Figure 8 Wish to buy Nano and Recommendation across different age groups
As seen from the graphs above, almost 66 respondents (61%) are willing to own Nano. So given
an opportunity a good number of respondents would be willing to buy Nano. The other graph
gives the split up of the recommendations being made to friends to buy Nano. The Age group
below 25 has been influential in suggesting Nano to others. The next age level (26-35) also has
seen to be influenced by Nano. So it could be a Strategy targeting these Age segment groups for
marketing Nano.
Car Brands
35
30
25
20
15
10
5
0
The respondents were asked to give their feedback on the Tata Nano. Close to 35 respondents
were unable to give in the feedback about various features of Nano. Features and the acceptance
levels of the respondents are given below.
10%
21%
7%
40%
22%
The respondents have rated Tata Nano as a better car in terms of the Driving comfort. There had
been around 21% who were unable to comment on this aspect.
2% 7%
30%
23%
10%
28%
In terms of the Drive in Hills, the vehicle stands anywhere between Average to Very Bad. The
Nano engine is the one of the smallest and the power is moderate compared to other cars.
0% 14%
23%
23%
13%
27%
6%
20%
4% 32%
9%
29%
The 4 gear system has also not being liked by the respondents as many have given „average(3) –
poor(4)‟ rating for this feature. Almost in all Cars it‟s the 5 speed system and even in Nano, this
is an issue. Hence even the Tata Motors is planning to come up with the updated version of Nano
with the 5-speed system by 2011.
1% 8%
21%
22%
17%
31%
Nano has been a big boon to the economic category people as the mileage it gives is the best in
Indian roads. When asked about the mileage that they get, one of the Nano users said that the
mileage very easily comes to 22 Km/liter.
22% 17%
0%
8%
37%
16%
The fuel tank capacity has also been a issue as the capacity is considered to be small. Hence in
case of planning for long distance trips, the tank had to be refilled quite obten.
5%
23%
19%
8%
25%
20%
The performance of Nano has been good as many respondents have appreciated for being a
Smart performance vehicle.
14%
21%
9% 23%
10%
23%
2% 11%
22%
10% 27%
28%
The delivery of Nano has also been an issue which Tata has faced for the very first time. There
had been a huge response for buying nano. The delay has happened due to the shift of the
manufacturing plant from Singur to Sanand. So the perception of the respondents is also in a
negative trend because of this.
The 2-wheeler to Nano shift is quite well reached in the minds of the customers with more
respondents feeling that Nano would take over the two wheeler market. May be because of that
or so Bajaj Auto which has got a strong hold in the two wheeler market has decided to launch a
small car in same kind like Nano.
7%2%
24%
12%
55%
To check the level of association of a dependent variable with the independent variable we use
cross tabulation using chi square.
To check the association of the Preference to buy Tata Nano Vs Age category.
Ho: No association exists between the age and the preference to buy Tata Nano.
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 3.733(a) 4 .443
Likelihood Ratio 3.690 4 .450
Linear-by-Linear
.015 1 .902
Association
N of Valid Cases
106
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is 2.70.
The Asymp. Sig value is greater than 0.05 indicating that the Null Hypothesis cannot be rejected.
Hence in a way we accept the null Hypothesis which means that no level of association between
the Age and the preference for buying the Tata Nano from the sample drawn.
To check the level of association between the Preference to Buy Tata Nano Vs. Income Level
Ho: No association exists between the customer preference to buy Tata Nano and their Income
level
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 5.946(a) 4 .203
Likelihood Ratio 5.883 4 .208
Linear-by-Linear
.852 1 .356
Association
N of Valid Cases
106
a 3 cells (33.3%) have expected count less than 5. The minimum expected count is 2.80.
Again the Asymp significance value is greater than 0.05 indicates that the null hypothesis cannot
be rejected. Thus we mean to say that there exists no level of association between the Preference
to Buy Tata Nano and Income Level.
To check for the association between the preference of for Tata Nano and Suggesting Tata
Nano for friends and relatives.
Hypothesis Definition:
Ho: No association exists between the preference for Tata Nano and those suggesting of Tata
Nano for friends and relatives
Chi-Square Tests
Asymp. Sig.
Value df (2-sided)
Pearson Chi-Square 5.026(a) 2 .081
Likelihood Ratio 5.012 2 .082
Linear-by-Linear
4.114 1 .043
Association
N of Valid Cases
96
Table 14 Table 13 chi square test Tata Nano Preference Vs Suggesting Tata Nano
a 2 cells (33.3%) have expected count less than 5. The minimum expected count is 3.08.
Again the Asymp significance value is greater than 0.05 indicates that the null hypothesis cannot
be rejected. Thus we mean to say statistically that there exists no level of association between the
Preference to Buy Tata Nano and Recommending Tata Nano to friends and Relatives.
The factor analysis is performed with the responses received from 107 customers. The
value of KMO sampling adequacy is coming to be 0.626 which is greater than 0.5 – The criteria
needed to state that the data collected is sufficient to make an interpretation. A higher chi-square
value states that there exists factors that can be combined together. In other words it means that
the various statements have some correlation with one another. Hence factor analysis can be
performed with the existing data.
Co
mpo Extraction Sums of Squared
nent Initial Eigenvalues Loadings Rotation Sums of Squared Loadings
% of
Varian Cumulative % of Cumula % of Cumulative
Total ce % Total Variance tive % Total Variance %
1 6.411 26.714 26.714 6.411 26.714 26.714 5.204 21.684 21.684
2 5.563 23.179 49.893 5.563 23.179 49.893 5.019 20.912 42.597
3 2.481 10.338 60.231 2.481 10.338 60.231 2.539 10.580 53.177
4 1.799 7.498 67.728 1.799 7.498 67.728 2.422 10.090 63.266
5 1.575 6.561 74.289 1.575 6.561 74.289 2.123 8.844 72.110
6 1.452 6.050 80.339 1.452 6.050 80.339 1.774 7.394 79.504
7 1.119 4.661 85.000 1.119 4.661 85.000 1.319 5.496 85.000
8 .742 3.091 88.091
9 .535 2.229 90.320
10 .433 1.805 92.125
11 .374 1.558 93.684
12 .323 1.346 95.029
13 .255 1.060 96.090
14 .178 .742 96.832
15 .166 .690 97.522
16 .137 .573 98.095
17 .111 .463 98.558
18 .108 .449 99.006
19 .080 .335 99.341
20 .053 .221 99.562
21 .035 .144 99.706
22 .032 .132 99.838
23 .023 .096 99.934
24 .016 .066 100.000
Table 16 Total variance Explained - Factor Analysis
The total variance explained table explains that by combining all the 24 statements to seven
factors, 85% of the cumulative variance can be explained.
Rotated Component Matrix(a)
Component
1 2 3 4 5 6 7
I feel taking Suggestions
from my family members is
very important to me while .935
selecting Tata Nano.
1 I would like to see more aggressive promotional campaigns for awareness about
the Tata Nano available in the market
3 The Price of the Car to fit my budget is very important to me while selecting a
Value for Money
Car
4 I would look at the Festival Season/Offers provided for Tata Nano while
5 I would look into the resale value of the Car after some time while selecting a
car.
6 I would look into the Mileage of the car could give while selecting a Car
12 Nano satisfying the emission norms of Bharat Stage II and Stage III standards
are very important for me for selecting Nano
13 I would look into buying of car of Indian Make
15 The Brand Name associated with the Tata Nano is very high
17 Safety elements are very important in the Car while selecting a Car
Core Factors
18 I would want Nano to be a more attractive car
22 I feel it is important for Nano to have inbuilt power steering Augmentative Factors
23 Effective after Sales Service is very important for me to select Nano. Post purchase Factor
As we could see there are few changes in the variables getting clubbed when we compare the
Pilot study results with the final sample test.‟ The Value for Money‟, „External Influencing
Factor‟ , Desired Factor‟, „Augmentative Factor‟ has been the same in both the studies.
The only difference has been in the Core factors that did not contain the after sales service. This
has pronounced as a separate factor altogether.
Now if we look at the factors that we could target, there is a strong Value for Money Involved in
Buying Tata Nano. The Car has actually been for the people who wish to shift from two wheeler
but do not have the luxury to buy a Car. So the aspects like Price of the Car, The Resale value,
the mileage factors need to be considered as these drive the buying intensions for the customers.
If we look at the second factor, those are the factors from outside that could influence the
purchase of Car. The recommendations from family and friends could be a part of it. So its
looking if Tata Nano could suit the family travel. The satisfying of the emission norms and the
Information provided by Car Magazines could also be a part of the external influencing factors.
The Psychological factors include aspects like Be Indian, Buy Indian, and trying to associate the
Brand of Tata with that of Nano. The core factors include Safety and Attractiveness of the Car.
When Nano was shown to the world, what caught everyone‟s attention was how different the car
looked. So the Look of the car has been well and even considered as a Core factor for the
preference level towards Nano.
The Car Insurance and convenient mode of payment could be helpful in creating a desired
interest towards buying Nano. The company may certainly form tie-ups with a lot of other
lending institutions for effective loan offers.
The correspondence analysis is done to study the perception of each aspects associated in the
minds of the respondents. In the questionnaire we had asked the respondents to rate the Cars
(Maruti 800, Alto, Nano, Car1, Car2,Car3) on a scale from 1-10 with 1 being the Best. So the
same way the data was captured and correspondence analysis was performed on that.
There happened to be variation in the „Car1‟,‟Car2‟,‟Car3‟ that only a few had filled. Thus those
had been left for uniformity in the analysis. Hence we consider only those three listed Cars. The
Means for these cars are taken and the same is compared with the aggregate rating on each
parameters. The data table is available in Annexure IV
In this case we are trying to understand the rating being given for various factors used in factor
analysis and how well it is influenced to the age of the respondent. Based on the age level there
has been variations in the factors listed. the graph below explains the factors that are most
preferred(1st Quadrant) and the factors least preferred (3rd Quadrant). The detailed output is
available in Annexure V.
The age group less than 25 years has preferred factors like attractiveness, insurance, spare parts
availability etc.,
For the age group 26-35 years, factors like low priced, promotion, mileage and resale value are
being preferred while buying Tata Nano
MANAGEMENT RESEARCH PROJECT (DRAFT REPORT) Page 63
Figure 23 Factors mostly preferred by age group 26-35
In the age group of 36-50 years group the factors like mileage, safety, accessories, attractiveness
and low priced are being considered
The level of awareness of Tata Nano is very high among the respondents. There is also a
strong Brand association with Tata Group and that has made Nano to be looked into a
revolutionary product.
Out of the respondents surveyed, Tata Indica has been more in number compared to all
other cars. So Tata Motors can try to tap these Indica users to recommend/suggest Tata
Nano to their friends and relatives. Its easy for them to push this product to these people.
Factors like Safety, Mileage and Performance have been rated closely rated as „Above
Average‟. The factors like long drive, hilly drive, delivery have been close to „Average‟
and factors like 4-speed gearing, fuel tank capacity have been rated below average. In
terms of correcting the product, these aspects need to be re-visited as it could be deterrent
for future potential buyers to choose this product.
The external influential factors have shown to be strongly influence factor for the
customer preference to buy Tata Nano. Hence the suggestions from others are important
driving factors to buy Tata Nano. Another important observation from chi-square test is
that there is no relationship between the Buying of Nano and Suggesting of Nano
according to this sample.
The Correspondence analysis has shown Nano to be closer to aspects like Dealers,
Variety, Brand Image. But factors like comfortness, safety are close to Alto and
affordability factor close to Maruti 800. Hence Tata Motors should have to be more
aggressive in clearing this from the customer mindset that Tata Nano is even more
affordable than Maruti 800.
Across different age groups, the preference for Nano for various factors had kept on
changing. Thus the different variants of Nano can help cater to different age groups in
terms of variations in features.
The concept of one-lakh car has been achieved. But to cater to the customers who are
ready to shell out few more thousands for additional features, those prospects should not
be left out in the market. Hence by coming up with different models with different
features, the entire small car market can be captured.
Nano has definitely been able to bring the automobile revolution in terms of providing
affordable-safe small car. The product has been in market for just around six months. The initial
response has been amazing in terms of more than 2 lakh people applying to buy Nano. As we
could see from the survey results that anyone would be willing to buy a Nano and the two-
wheeler to Nano shift could be phenomenal. Unlike other new-product adoption cases, Tata
Nano had been easily created the awareness needed with good promotional campaigns. Now to
take this a leap higher, the company has to identify the ways to increase the Nano share in the
market by coming up with additional features that could fill in the gap existing between the cars
above 3 lakhs and the car in the range 1 lakh.
The lessons to be learnt in a new product development taking the example of Nano could be
many. The very important of the lot could be thinking out of box. This was done by Tata Motors
where they just did not rest with the laurels of Tata Indica. They had a vision of launching a one
lakh car and they had undergone the technological breakthroughs in this regard. The car is
smaller than Maruti in terms of the outside dimensions, but 20% more seating capacity by
making radical changes in the designing. The trust built over the years by the Tata group had
made the Tata group loyalists to accept Nano as a symbol of the small car revolution. The vision
of Ratan Naval Tata has come true, he had made to realize that the real fortune lied in the bottom
of the pyramid and international car makers having set plans to come up with the small car
models in the market is an indicative of this fact.
NANO INTERIORS
NANO DESIGN
NANO ON A GO
26
Obtained from Tata Nano Website -
http://tatanano.inservices.tatamotors.com/tatamotors/index.php?option=com_whynano&task=comparison&Item
id=302
CUSTOMER QUESTIONNAIRE
Respected Sir/Madam,
We are conducting a Survey to analyze the Customer adoption process for TATA Nano car. In this
regard we request you to kindly spare a few moments of your valuable time and fill up the following
Questionnaire. Kindly note that there is no right or a wrong answers for these questions. It is your
opinion that matters.
selecting a Car
2. I feel taking Suggestions from my family members is very important 1 2 3 4 5
6. Nano satisfying the emission norms of Bharat Stage II and Stage III 1 2 3 4 5
Nano
10. The Insurance Facility offered by a Nano Dealer is very important for 1 2 3 4 5
me to prefer Nano
11. I feel it is important for Nano to have inbuilt power steering 1 2 3 4 5
14. I would look into the resale value of the Car after some time while 1 2 3 4 5
selecting a car.
15. In-built power window is very important for me while selecting a car. 1 2 3 4 5
17. I look into the Information Provided By Car magazines while buying 1 2 3 4 5
the car
18. I would look into the Mileage of the car could give while selecting a 1 2 3 4 5
Car
19. I would want Nano to be a more attractive car 1 2 3 4 5
21. Safety elements are very important in the Car while selecting a Car 1 2 3 4 5
22. I would look on the Car Accessories while selecting the Car 1 2 3 4 5
23. I would look into the spare parts availability while selecting a car. 1 2 3 4 5
24. I would look into your friends and relatives opinion while selecting a 1 2 3 4 5
car
8. Are you satisfied with the use of Tata Nano (Please skip this if you do not own a TATA Nano)
a) Yes b) No
9. Tick the preferred rating for the following features relating to Tata Nano. ( You may tick the last
column in case you are unsure about the particular feature)
SNO STATEMENTS 1 2 3 4 5 X
12. The Ease of Opening and closing the Doors and Windows 1 2 3 4 5
10. Do you feel that Nano can pull the Two-wheelers market by making them prefer Nano Car?
a) Very Likely b) Likely c) Not sure d) Unlikely e)Very Unlikely
11. Would you like to own a Tata Nano?
a. Yes b) No
12. Your friend is considering buying a Small Car. Would you recommend Tata Nano?
a. Yes b) No
13. If No, Please specify why you feel so ________________________________________________
Personal Details:
Age: 4 above 50
Age: 1 under 25
Iteration history for the 2 dimensional solution (in squared distances)
1 .12546
2 .10697 .01849
3 .10565 .00132
4 .10512 .00053
For matrix
Stress = .13436 RSQ = .93715
Age: 1 under 25
Configuration derived in 2 dimensions
Stimulus Coordinates
Dimension
Stimulus Stimulus 1 2
Number Name
Age: 2 26-35
Iteration history for the 2 dimensional solution (in squared distances)
1 .24414
2 .17947 .06467
3 .17068 .00879
4 .16861 .00207
5 .16789 .00072
Age: 2 26-35
Configuration derived in 2 dimensions
Stimulus Coordinates
Dimension
Stimulus Stimulus 1 2
Number Name
Age: 3 36-50
Iteration history for the 2 dimensional solution (in squared distances)
1 .19758
2 .16584 .03173
3 .16030 .00554
4 .15846 .00184
5 .15741 .00105
6 .15678 .00063
For matrix
Stress = .15190 RSQ = .89207
Age: 3 36-50
Configuration derived in 2 dimensions
Stimulus Coordinates
Stimulus Stimulus 1 2
Number Name
Age: 4 above 50
Iteration history for the 2 dimensional solution (in squared distances)
1 .09611
2 .08170 .01441
3 .07997 .00173
4 .07961 .00036
For matrix
Stress = .08871 RSQ = .96662
Stimulus Coordinates
Dimension
Stimulus Stimulus 1 2
Number Name
Abbreviated Extended
Name Name
accessor accessories
attracti attractiveness
availabi availability
brandnam brandname
carmagaz carmagazine
emission emissionnorms
family_t family_tours
indianma indianmake
insuranc insurance
powerste powersteering
powerwin powerwindow
promotio promotion
resaleva resalevalue
salesper salesperson
salesser salesservice
suggesti suggestion