Tata Nano BCG (With reference to the product life cycle)

By discussing a lot we made this BCG matrix of TATA motors. Here we have placed the cars as per the stage they have reached in their life cycle. But here we put more emphasis on the the TATA NANO because it is one car which has created all in all a kind of new segment and this product is really different from all other. So we decided to analyse that what is the present scenario and what will be the future of TATA NANO. TATA NANO: Launch & Positioning The Peoples Carfed ( Question Mark Stage)(introduction stage) Tata Group introduced the revolutionary Tata Nano in January 08. This created a immediate stir among Indian Consumers. Even before its Launch, it was dubbed as Car for Masses The Peoples Car. However, low Price of the car is one of the crucial factors, which is going to deciding the future of Tata Nano. Deriving sales from Bottom of the Pyramid, launch was successful and was overbooked by almost 200%. Globally car is positioned as The Worlds Cheapest Car, which does not compromise quality, safety and environment. Given the low Profit margin, critiques initially questioned the Price Target of INR 1 lakh. They questioned the overall strategy of the launch. Questions were raised over the safety of the car. However, the unprecedented hype of Tata Nano within the Indian Masses ensured the smooth launch of Tata Nano. Tata Groups formidable Marketing & Distribution Muscle, will ensure that small cars are going to flood the Indian Roads. Core strength of the group the appeal within the Indian Masses, decided the initial launch of Tata Nano, whereas product performance and review of the customers is going to decide the future sales of Tata Nano.

TATA Nanos Target Segment ( To reach towards the Star stage)(Growth stage of PLC) Nano aims to carve out a niche segment for itself in the Indian automobile industry. Indias burgeoning small car market holds huge potential. The booming economy and the accelerated growth of lower middle class is expected to generate very high demand for small cars in the near future. The closest competitor in the 4-wheeler segment is Maruti 800. Maruti 800 is slowly moving out of the market after ruling the small car segment for more than two decades. Its price is higher (>2.3 Lakhs) compared to Nano. Also the Maruti 800 has flooded the Indian roads for a long period and people are weary of its looks and functionalities. More recent cars such as Maruti Alto and Chevrolet Spark are also wooing customers in the small car segment. But their pricing and positioning is totally different than that of Nano, preventing any direct competition. Real threat comes from the upcoming small cars from Bajaj and Renault-Nissan etc. They will directly compete with Nano in the same segment. But the first mover advantage of Nano will prove decisive in the long run. The other major competitor for Nano is the 2-wheelers. Most of the young people, students and lower and middle income families currently depend on 2-wheelers for their day to day activities. Primary reason for this is the lower initial cost and lower maintenance cost. Motorcycles such as Bajaj Pulsar has snatched the attention of the youth market, while Hero Hondo motorcycles have been the favourites for family users. In order to analyze the strategies for the launch of Tata Nano, it is imperative to understand the segments and target customers that Tata Nano caters to. Also, the positioning is a key element in deciding the marketing and distribution strategies. The target customers for Tata Nano are lower and middle income families, who aspire to upgrade to 4- wheelers from being 2-wheeler users. Many of such families stay away from purchasing 4wheelers primarily due to the affordability factor. Affordable purchase price, low maintenance cost, increased safety, usefulness as a family vehicle are the factors that influence such buying decisions. The second set of customers Nano is targeting is the youth, especially students who prefer young, trendy and innovative vehicles. 4-wheelers with their inherent safety characteristics would appeal more to them over 2-wheelers. Again cost would be the differentiating factor for Nano over other 4-wheelers. Similarly, Nano also targets the families who want a second car, mostly for women and children. Nano has been positioned as an innovative and trendy car, as opposed to a cheap product. Emphasis has been done on the quality standards, safety features, environment friendliness and innovative design. It leverages the TATAs trust and care for the people throughout its positioning and publicity. Tata nano now slowly and steadily moving towards the star area of the matrix. To achieve the star position in the matrix nano has used various marketing and promotion technique are as follows;

To promote the Nano they focused on 2 key attributes: o strong need of the Indian families and o Price consciousness of the masses. The car was envisioned by, Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly peoples car. Through familiarizing itself with the culture of the Indian market TATA Nano used effective communications to hit the target. Key components of its marketing messages included these key attributes strong family values and low price Additionally Nano used innovative and current successful promotions. Tatalana was to be a promotion that would put lana, cash, back into hands of purchasers. Nano would offer cash to purchasers as an incentive to buy or finance a Tata Nano. These kinds of promotions have proved highly effective in India. But with the increasing competition and many new cars of different companies coming into this segment can move the tata nano into the cash cow stage. It will surely take time for tata nano to go in the cash cow stage because it is the only one of the best and cheap car of its segment. So it will enjoy a high relative market share for a very long time. After coming into the cash cow stage tata nano will not have to spend a lot on promotions because it will be really popular by then and will be generating ample amount of revenue. This will be stated as the maturity stage of nano in the PLC. But as per our analysis and discussion tata nano will not go or will not try to go in the dog stage. They will revive the product and again will introduce the product repeating the whole cycle. This is because tata motors understand the relevance of small car in middle class India. TATA NANO may not be catching up fast but surely it is a product to stay on a long term. And with the constant innovations of TATA Motors in various different fields will surely help tata nano enjoy high relative market share for a long time.

Thats all folks. Thank you