BBB 4M1 Unit 2 Nano Plan Exemplar

Tata Tata NanoNanoThe PeopleThe People’’s Cars Car

By: Lial B, Christina C, Alyson D and Stephanie V

Company GoalsMarketing MixSWOT AnalysisCompetitionPricingConsumer ProfileExternal Marketing FactorsPromotion StrategyTime Line

Agenda

Company Goals

Brand ImageBrand ImageWhen Tata expands to Canada, they want to have an overall good brand image in order for consumers to want to buy the Nano

Overall safety and reliabilityOverall safety and reliabilityTata wants to prove to be a reliable car and meet necessary safety standards

Environmentally FriendlyEnvironmentally FriendlyThe Nano reduces fuel economy, and is said to meet the fuel efficiency of domestic and European emission standards.

AffordableAffordableThe Nano would be priced at $2,500 US, which is ultra cheap compared to the prices of other cars in the marketThis would able thousands of consumers to be able to obtain car ownership. Consumers could include low income families or students.

Stephanie

Company Goals

Revolutionize the IndustryRevolutionize the IndustryA goal is to revolutionize the auto industry which may force other manufacturers to lower their prices to reach that of the Nano. The company is also hoping it will become the basis for cheap car models in developing markets around the world.

Stephanie

The Marketing Mix

ProductProductPerception of car

small car (compact but with big interior), drives like a big car.uniquely shaped car

Personal Perceptionsunique carbig potentialpractical and affordable

Vehicle FeaturesHighlights, safety features, engine type

http://tatanano.inservices.tatamotors.com/tatamotors/index.php?option=com_whynano&task=experience&Itemid=303

Lial

The Marketing Mix

PricePriceStarting price in India:

Rs. 100,000(approx. $2,000 US, approx. $2,997,20 Can)

Goal Price: $5,800 Can

PlacePlaceManufactured in IndiaSold through dealerships or internetAlliance created with Nissan

Sold at Nissan dealershipsGood Strategic Alliance due to its costumer loyalty, establishment in North America, etc.

Lial

The Marketing Mix

PromotionPromotionCreate Hype about the productAdvertise the features of the car

the compact yet spacious size, going for winding roads

Advertise the benefits of low cost, yet high quality.

Allow consumers to be aware that quality of car is high, however cost is low

Lial

SWOT Analysis

StrengthsStrengthsprice is lowcompact sizebig interior for its smaller sizemaximum interior space due to location of engine (rear)smooth drives, good for winding and narrow roadsfuel-efficient

WeaknessesWeaknesseslack of features in comparison to competitionsafety regulations may not be met

Christina

SWOT Analysis

OpportunitiesOpportunitiesstrategic alliance to expand consumer base and create more product awarenessuse promotion techniques to specifically target the desired consumer

ThreatsThreatscompetition – both direct and indirectlack of meeting safety requirements

Christina

CompetitionMERCEDES (Smart) Smart Fortwo Coupé

Starting at $14 990HONDA Fit

Starting at $14 480BMW Mini Cooper

Starting at $19 500HYUNDAI Accent

Starting at $13 599MAZDA Mazda 3

Starting at $15 999CHEVROLET Cobalt

Starting at $15 710DODGE Hornet

Unknown (intro in 2010)

Alyson

VOLKSWAGEN Jetta Starting at $17 605

TOYOTA Yaris HatchbackStarting at $14 750

TOYOTA MatrixStarting at $16 665

KIA Forté KoupStarting at $18 495

SUBARU ImprezaStarting at $20 995

FORD FiestaStarting at $12 999

Competition

Alyson

a

High Cost

Low Cost

LargeSize

Smart Fortwo Honda Fit

Kia ForteMatrix

Yaris

Jetta

DodgeHornet

Ford Fiesta

Tata Nano

Impreza

Mini Cooper

Cobalt

Mazda 3

Hyundai Accent

Compact Size

Alyson

Positioning MapCompact Size, High Cost

Relatively High Cost, Large Size

Micro-Compact, Reasonable Price

Reasonable Cost, Large Size

Reasonable Cost, Mid-Size

Low Cost, Mid-Size

Micro-Compact, Extraordinary Low Price

PRICINGStarting price in India:

Rs. 100, 00 (approx. $2 160 CDN.)Rs. 172, 000 (approx $2 800 CDN.) for LX Model

Alyson

Pricing

FEATURES NEEDED: Mirror on right side of car = $ 500.00Radio/mP3 and speaker system = $ 500.00Antenna = $ 250.00Modern airbag system = $ 1000.0012 V power outlet = $ 250.00Digital instrumentation (clock, notifications, etc.) = $ 250.00Cruise control = $ 250.00

_____________$ 3000.00

(Additions) + Original Cost = TOTAL COST (CDN)

$3000 + $2800 = $5800.00$5800.00

Alyson

Pricing

This table and graph show the new motor vehicle sales in Canada.There are 747,671 new passenger cars, and the Tata Nano should expect to take up 2-3% of this total market, being a very new car and targeting a completely different segment and target audience.

New motor vehicle sales

2005 2006 2007 2008 2009

seasonally unadjusted

vehicles

New motor vehicles

1,630,310

1,666,327

1,690,538

1,674,145

1,484,856

Passenger cars 845,222 863,161 859,003 894,506 747,671

North America 574,639 573,102 551,001 557,422 426,709

Overseas 270,583 290,059 308,002 337,084 320,962

Commercial vehicles 785,088 803,166 831,535 779,639 737,185

North America 673,205 681,244 727,909 667,139 639,306

Overseas 111,883 121,922 103,626 112,500 97,879

Source: Statistics Canada, CANSIM, table (for fee) 079-0003 and Catalogue no 63-007-X.Last modified: 2010-04-19.

Stephanie

Pricing Strategy

Pricing Strategy

The price strategy that would be used is penetration pricing

The Nano right now is already set at an artificially low price in comparison to other cars in the Canadian market

This is needed in order for it to gain a respectable part of the market share, and then the price could be increased

The price increase will have to only be a minimal general increase so it still targets the consumer as an ultra subcompact affordable car

Stephanie

Consumer DemographicsPersons in low income before tax (In percent, 2003 to 2007)

2003 2004 2005 2006 2007

prevalence1 in %

All persons 16.0 15.8 15.3 14.5 13.6

Under 18 years of age 18.0 17.9 16.9 15.9 15.0

18 to 64 15.5 15.4 14.9 14.3 13.4

65 and over 15.2 14.1 14.5 12.9 12.5

Males 14.8 14.7 14.4 13.5 12.9


18 to 64 14.5 14.4 14.2 13.6 12.7

65 and over 10.2 9.4 9.4 8.3 8.5

Females 17.2 16.9 16.2 15.5 14.3


18 to 64 16.6 16.4 15.7 15.1 14.0

65 and over 19.2 17.9 18.7 16.6 15.8

Christina

Consumer Demographics

Christina

Focus on the red and green lines.

Red – other fees aside from tuition, per student

Green – other fees aside from tuition, per student [projected]2008 data

Consumer Profile

Target MarketTarget Marketmiddle to low income families

– can afford this without going over their budget or creating a debt for themselves

post-secondary students– can afford this car without increasing their debt from

tuition– good for driving around campus because of its

compact size and good for going through winding, small roads

- get students from point A to point B

Christina

Consumer Profile

Target MarketTarget Marketnewlyweds

– there’s no immediate need for a family car– help them through their financial transitions (buying

a new house, etc)

singles– no need for a large car– get them to and from work– get them through traffic in heavy populated areas

(downtown)

Christina

Consumer Profile

Basic Needs and WantsBasic Needs and WantsNeeds

– basic car to get them around from point A to point B– basic features to make the ride enjoyable, yet no

need for luxury

Wants– lost price and low cost to maintain– fuel-efficient– have an environmental conscience to better their

own conscience

Christina

Consumer Profile

Buying ProcessBuying ProcessNeed Recognition

– gas prices are too high or tuition is too high– previous car broke down and needs to be replaced

Information Search– look to the Tata Nano website for further information– word of mouth– heavy advertising techniques (print ads in all

magazines, outdoor ads, TV ads, radio ads, etc)– promotion by several dealerships carrying the Tata

Nano

Christina

Consumer Profile

Buying ProcessBuying ProcessEvaluation of Alternatives

– ensure potential buyers that the Tata Nano will accommodate for all their needs and wants

– use heavy advertising techniques and different promotions

Purchase– the customer purchases the Tata Nano

Christina

Consumer Profile

Buying ProcessBuying ProcessPost-Purchase Behavior

– conduct surveys to see customer satisfaction – keep track of the number of times customers come in

for check ups

*Customers could be offered a five year warranty plan, 0% financing or one year gas payment – must be generous. This would be targeted toward the target market in the information search and evaluation of alternative process steps.

Christina

Outside Factors and Marketing Environment

Current real economic condition as they relate to vehicle sales.

Current Economy of Canada:GDP (PC): $38,400Unemployment Rate: 8.5% - this is 96th in the worldPopulation below Poverty Line: 10.8%

Current Economy of India:GDP (PC): $3,100Unemployment Rate: 10.7% - this is 164th in the worldPopulation below Poverty line: 25%

Lial


Relation to Vehicle Sales:• GDP per capita - Canada is at an

extremely high standard of living in comparison to India.

o Tata Nano might have the problem for the lack of interest for purchase.

o The Canadian economic conditions are one of the world’s highest and strongest, the population is mostly of interest to high quality and most suitable cars, ones that most comfortably suite their way of life.

Lial


A car like the TATA at a low cost can provide these people, that are unemployed or have family members that are unemployed, transportation.In comparing the two countries, India has a 10% greater percent of people under the poverty line.TATA would be more popular in India then in Canada

Lial


Lial

Product Life CycleProduct Life Cycle


Product Life CycleTATA Nano is will enter the Canadian car in its introductory stage.

Although the Tata will be in its introductory stage is will almost directly hit the competition

This will come into Canada with no past presence. It’ new, its unknown and should evolve starting at the top, not work its way up.

Lial

Promotion Techniques

Christina

Geared toward product awareness –emphasize the newness and benefits

Geared toward keeping the Nano in consumers’ views and minds – it’s all they should talk about

Geared toward fighting competition –while trying to innovate the product

Look at the life of the Nano so far and make a final decision


create hype– make consumers excited to see this product before it

even enters the Canadian market

advertise the compact, yet spacious shape and size of the car

– attract post-secondary students looking for a comfortable car to take them around campus

– singles working in a populated, heavy traffic area looking for a enjoyable car that can maneuver through occupied streets

Christina


advertise the low price of the car– attract those lower income families who just need a

car to fit their basic need– attract post-secondary students looking to reduce

possible debt or loans

Where and how will the Where and how will the TataTata Nano be Nano be sold?sold?

– sold directly through dealerships or through the internet

– advertised and available through product and company websites, TV and radio commercials, magazine and outdoor ads, flyers in the mail, etc.

Christina

Push vs. Pull Strategies

Pull StrategyPull StrategyTata Nano will first start off with a pull strategy in order for Tata as well as Nissan to get an idea of the interest for this new car being introduced in the Canadian marketcustomers will have to request the car through Nissan dealerships in Canadaensures the amount of demand occurring and give Tata an idea of how much to supply in order to avoid an excess of supplygood way to start off the Nano because of the high uncertainty in demand with the target audience

Stephanie

Push vs. Pull Strategies

Push StrategyPush StrategyAfter gaining a more certain demand from consumers, they will begin the push strategy, in the middle of the growth stageWith the hopefully growing popularity of this car, the push strategy will ensure that everyone who wants a Nano will be able to get one where they want and when they wantimportant in keeping customers happy and not having to wait for their car because Nano is not a luxury car that is known as “rare” like some models of Mercedes or Porsche arewant customers to know that this ultra compact car is ready when they are

Stephanie

Centralized vs. Decentralized

1. Centralized1. CentralizedAs Tata Motors has a strong backing and establishment in India, the company would rely on this strength to produce the automobiles in a CENTRALIZED market

A centralized market produces all its products in one central location, “thinking locally, and acting globally”A form of “brand building”

This would allow the company to utilize its production facilities in India while growing in the North American market

Rather than investing in new production facilities before having a strong base

Alyson

Centralized vs. Decentralized

2. Decentralized2. DecentralizedIt would be a very intelligent investment to change to a DECENTRALIZED marketing strategy after gaining a North American loyalty

Using local (North American) facilities, distribution centres, agencies, etc to target international markets, “thinking globally, and acting locally”.

This process would be advantageous to:Significantly cut down shipping and transportation costsFurther establish the company’s presence in the North American market

Alyson

Advertising Ideas

Commercial StoryboardsCommercial Storyboardsit is important to target specific markets through our commercialsPOST SECONDARY STUDENTS

clips of students walking past a car dealership and look longing at the cars, until their face comes across the price; their face is shocked and sad, almost depressednext, a student wearing shades, very cool looking is driving a Tata Nano down the streetsad students follow the car and look back at the car dealership and that’s when they see the Nano on a pedestal; zooms on the pricevoice over: you don’t just have to wish for a car like the Nano, just go for it!

*give students the impression that it’s a ‘cool’ car, it’s something desirable and it’s affordable

Christina

Advertising Ideas

Commercial StoryboardsCommercial StoryboardsLOWER INCOME FAMILIES

dad is driving home from work with a huge bag in his handswhile driving, narrator is talking: "What can a slick, smooth car turning through winding roads and the smallest paths and gliding through the sun..."(dad turns into driveway)... do?"narrator says "everything, from the little most important things on the road....to what means the most"narrator" how do you spend your money?" "how about low?"as dad comes and hugs kids and kisses wife with big present at hand... narrator says "what matters to you...where are you going to spend your money?"narrator "It's what matters most...get what you want“

*give families the impression that it’s affordable because money is meant to be spent on more important things in life Lial

Move over, bicycles...

Advertising Ideas

Alyson

Print Print Ad 1Ad 1

THE TATA NANO: The decision is practically made for you.

Advertising Ideas

Alyson

Print Print Ad 2Ad 2

Strategic Alliance: Nissan Motors Canada

Qualities needed in the parent company:Strong customer loyalty basis

Nissan’s popularity and success signify its strong customer loyalty basis

Established in North American marketExpanded internationally in 1959, giving it an advantage in its knowledge in the market versus newer unaware companies

Already existing associations with ‘daughter’ modelsThe success of Infiniti as a luxury spinoff industry means Nissan is established enough to handle another name and model associated with it

Stephanie


Safety and reliabilityAccording to Consumer Reports Canada, after testing all brands of vehicles, 77% of Nissan and Infiniti vehicles were recommended to the consumer based on safety and reliability standardsIn 2008, Infinity was rated one of the three most reliable cars in Canada

High quality with reasonable priceNissan continues to have a good reliability and high quality image without the high prices that vehicles such as BMW, Mercedes, and Porsche have

No recent events that would deter marketEx. Toyota’s recent downfall in the automotive industry due to safety issues

Stephanie


Reasons for Nissan’s interest in Tata and the Nano being a part of their name and company is important to consider:Missing area in the market

Nissan currently does not have any models found within the sub or micro compact sectors of the auto marketA cheaper option in the company could be beneficial for opening up markets

Gather in a new target customerCurrently, Nissan is not a company of interest for students or individuals looking for a low-cost, fuel efficient vehicle

Will not compete with existing modelsWith no Nissan or Infinity model coming even close to comparison with the Tata Nano, there would be no inter-company competition or conflict between a Nissan and Tata vehicle Alyson


WillingnessThe fact that Nissan has already agreed to opening an alliance with Infinity signifies that they are accepting to association with different, foreign modelsForming an alliance with Tata would be a big risk, but it is one that they have taken before with a great outcome of success

Environmental ContributionCurrently, the Nissan and Infiniti brands have a poor fuel economy; therefore, they could see the highly efficient fuel usage of the Tata Nano as a way to gain a more positive environmental spin

Alyson

Timeline for Success

2010- Tata Nano will be first introduced to the North American market under the Nissan/Infiniti namewill be advertised first at Auto Shows in Canada in order for the consumer to be familiar with it before it becomes open to buy in the market and then anticipate its launchgreat deal of advertising (such as print ads and information booklets or brochures) will be needed nationwide to boost the image of the Nano2011- Tata will begin its launch into the market and will be first sold at limited Nissan dealershipsNissan will want to ensure that with the first one hundred purchases by consumers, that the Nano will meet their expectations of being a safe and reliable car

Stephanie


2012- With all hopes that the Tata Nano has performed well with customers and has developed a good brand image for itself and Nissan, it will start the growth stageit will be expanding itself to a wider selection of dealerships throughout Canada and more cars will be manufactured to ensure that any customer can have one2013/2014- Nano will have reached its maturity stage where many customers will already be familiar with this carwhen maturity starts to kick in, the company will start to think of what is next for Tata or what we could do to make the Nano different and better; a new version of the Nano or a different Tata car will be start to be advertised now

Stephanie


2015/2016- The Nano that was originally marketed will have hit the decline stage which means that there will not be as many consumers buying it, and manufacturing will have slowednew version of the Nano or a new Tata vehicle will have already been in the advertising stage, and will be introduced at this pointThis timeline would then again be followed, with a different aspect and approach to a new marketing plan to achieve a higher level of success

Stephanie

Thank You

Tata NanoTata NanoThe People’s Car

BBB 4M1 Unit 2 Nano Plan Exemplar

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