Executive Post Graduate Programme in Management (EPGP)

Marketing Management

Case: Positioning the Tata Nano

Submitted By

SANJAY BHATTACHARYA - EPGP-10-063

Marketing Management 1
Q1: What is the Target Segment for Tata Nano? Is this appropriate? Why/ Why Not?
Ans1: Following are the target segment for Tata Nano:
1. Lower middle class & Upper lower class consumers aspiring to car ownership for the first time.
2. The 2 wheeler users who are eager to upgrade to 4 wheeler but cannot do due to price.
3. Family of 3-4 members who have trouble while travelling on 2 wheeler.
4. College Students whose parents are concerned about the safety due to 2 wheeler.
5. Senior Citizens.
The target segment considered by TML was appropriate as based on the below, 2004-2005 data
reveals that out of 8.5million vehicles 77% are two wheeler owners. Complementing this post
liberalization (1991) there was substantial increase of household income in the citizens hence
increase in middle class consumers with higher disposal income for spend.

The target was to capture the consumers who were ready to spend more to upgrade. Hence TML
had undertaken correct target segmentation to start with together price tag of Rs.1Lac per car
which was in between two wheeler and Maruti 800.

Q2: What sales goal will you recommend for the Nano?
Ans2: To attain break even for the Sanand Plant following is to be considered:
Sanand Plant Cost to Build(Rs) - 15,000,000,000
Per annum capacity (units) - 350,000 units
Average Retail Selling Price(Rs) – 146,415
Less dealer Margin (4%)(Rs) - 5,856
TML net selling Price(Rs) - 140,559
Margin on Sales (15%) - 21,083
Break Even for Sanand Plant - 15,000,000,000/21,083 = 711,473 cars to be sold
But 18 months, product was to provided from TML plant in Himachal with 50,000 units to the
market. Hence for 18 months sales target should be 90% of the adhoc manufacturing capacity.

Marketing Management 2
 This will result in 67,500 units sale target for the 18 months. For the next 6 months this could be
incremented to the new production facility @ Sanand.

Q3: Analyse the positioning of Nano wrt to its competitors. What are the PoP and PoD of its
positioning strategy?
Ans3: Tata Nano nearest competitors was higher categories of two wheelers. Below are the
positioning of Nano
1. Safer (as compared to two wheelers)
2. Smartness of Car
3. Convenience
4. Pride in car ownership
5. Comfort in weather conditions
6. Power better than two wheelers

Success of Nano will result in reduced sales cannibalization of two wheeler segment.
POP: Safer, improved lifestyle, accommodates family of 4, comply with local regulations
POD: Priced half of the Maruti 800 (cheapest car available in market), fuel efficient,
Tata Brand.

Q4. How will you position the Nano to achieve that goal?
Ans4: I will position Nano as follows:
1. Position the Nano as a supplement to the higher range of two wheeler to
undertake the higher range and sway the midrange of two wheelers.
2. Item no 1 will undertake a developing market to add the numbers of the 76% of
the overall vehicles sales
3. Price positioning is already there to complement
4. Enhance the safety of the vehicle and address the flaws with due publicity
5. Enhance the service network and enforce better quality and reliability
6. Promotion has to be taken care the most as reflection of the advantages of
“People’s Car”.

Marketing Management 3
Q5.Why is the recommended positioning strategy superior to other positioning strategies that
might reasonably be considered?
Ans5: Owing to the availability of enormous resources and capabilities of the Tata Group it is
the best strategy to create a disruption in the market. Breakeven can be achieved after @ 4years
of launch (owing to the supply from the adhoc plant + Sanand plant operating at their peak
efficiency output). Once the market is picked up with the improved product and reliable
promotion sales will increment as spend capacities of the consumer added in middle class is
improving with double digit growth. Low Price (as per the launch) and improved quality will
enable incremental sales.

Marketing Management 4