Best Market Opportunity for Tata Nano

Introduction

In today’s world, car is the most important element in human life. It is not only important but also being a part of the world’s essential instruments. From these cars, Tata Group is a popular car manufacturing company in India and also imported to other countries besides India.

In Tata Motors Group, there are lots of ranges of cars designed and provided to customers by it. One of them is Tata Nano. In this report, the objective is to analyze the market potentiality of Tata Nano not only in India, but also in the overseas market with its benefits, considerable issues in the international market, comparison with Tata Nano with five countries from 200 countries which are the potential market of it, and lastly 4P’s of the market according to with TATA NANO. These are analyzed within two questions according to the requirement of the course.

About Tata Nano

Tata Nano is four passengers seated car built by Tata Motors firstly in India at the 9th annual Auto Expo launch on 23rd March 2009 and started its booking to customers on 9-25th April with a tremendous amount, about 200,000 cars. The sales of cars started on 9th July with the amount of Rs 115,000 Rupees, which is obviously cheaper than Maruti 800, which was the cheapest car available in India. It becomes famous day by day by producing the least expensive car in the world’s car market.

So, Tata Nano is being an important part of 21st century’s cars with smaller, cheaper, lighter, and inexpensive, which features are being attractive to customers as having personal transportation. Even Wall Street Journal has announced Tata Nano as a small car in the global trend to remove global traffic jams.

Key Benefits of Tata Nano

There are several key benefits of TATA NANO in consumer perspectives and also the world’s market of cars. From lots of benefits, in this report, some benefits are highlighted and discussed below:

• Small in Size: NANO, which means small in the language of Gujrati, and also in English often it means small. TATA Group also focuses on the car, which has four seated but should be small in size. So, it is the smallest car from the group of TATA Motors and also comparing with other car manufacturers.
• City Car: In India, there are 90,000 people killed in road accidents every year and also polluted the cities. So, TATA NANO is promised to being best suited in the city, which creates less traffic jam and also removes road accidents happened with cars.
• Economical: TATA NANO is getting priority of media attention as targeted low pricing cars, which is the main ambition of India as to being a modern nation. It has tinier priced tag to become India as a modern nation and urban prosperity in Indian Economy by 65%.
• Cheap to Run: As it is said before that, TATA NANO is the least expensive produced car in the world with 100,000 Rupees and also cheap to run for middle classed people.
• Environment Friendly: As TATA Motors promised to provide eco-friendly models by TATA NANO with the gasoline model, as preferable to people’s cars with low costs and also used compressed air as fuel and electronic version.

Considering Issues with International Market

TATA Motors are now operating difficult conditions in international market with global economic downturn comparing with Indian sales and exports in higher interest rates. But there are some positive factors which can be used as positive factors to improve sales volume of TATA Motors with the dealing of Government of India.

• Safety Issues: In India, every year many people are killed by road accidents. For this reason, TATA NANO is introducing crash test facility with regularity requirements by the Government, which are maintaining crumple zones, proper uses of seat belts, and strong seat anchors. Except Britain, all countries are approved these considerations. Another safety issues are airbag system with electric versions, intrusion resistant doors, anchorages, and tubeless tires.
• Brand Issue: With the strong brand issues, TATA NANO has decreased the sales of Maruti 800 up to 20-30%, because people are having same facilities with low price, which is almost half of Maruti. TATA NANO has also promoted its brand in online according with traditional methods of advertising. They are also using social communities as a promotional tool. Not even only India, but also caught the international market with online buzz to the regular people with the credit facilities.
• Difficulties in Market: TATA NANO is affected the car market in India comparing with used cars, which are the main competitors of NANO. Other competitors are Bajaj Auto, Fiat, General Motors, Hyundai, and Toyota, which are now building small cars to compete with NANO to attract middle class consumers group.
• Characteristics in Success Market: Considering with eco-friendly environments and extraordinary low prices are most successful factors in the aggravate pollution and excess demand of oil. TATA NANO is reducing the emission of pollution and increasing the usage of cars with considering environmental protection.
• Customers Care Fits the Benefits: TATA NANO always prefers its customers first. For this reason, they are primarily supplied cars as borrowed by the customers with only 8.5% interests. This facility is given only first one lakh customers. Customers can also get benefited by online directories of TATA NANO.
• Gas: TATA NANO is using compressed air as energy source instead of gas, which is developed by Moteur Development International (MDI).
• Population Density: In 2008, Indians have 1000 cars, but with low cost innovation of NANO, it becomes larger tremendously not only in India, but also in China and other neighbouring countries. It’s also affected negatively with the high demand of gasoline and global carbon emission is increased. The Asian roads are not able to afford to ride so many cars.
• Environment: In crowded cities, TATA NANO can replace the overload of two stroke polluting vehicles, which is creating more disastrous in environment according to policy and regulatory factors provided by Government. This will be benefited the environment judged by the Centre for Science and Environment in New Delhi.

Selected Five Countries out of 200 Countries of Tata Nano in Worldwide

Tata Nano is going to be introduced in almost 200 countries all over the world. USA, UK, Canada, Japan, Russia, China, Middle East countries, Germany, France, Thailand, Pakistan, Indonesia and many other countries are placing orders for Tata Nano. The Tata motors wishes that Tata Nano could be available in almost everywhere in the world and people of different countries can get cars in a low price. Tata is launching the Nano cars not only to the poor countries but also in the rich and economically developed countries.

Collected Information to Select Countries

To select five countries among these 200, the information regarding Tata Nano availability in those countries is assessed. This is done through some steps.

• Evidence: At first the evidence of existence of Tata Nano car in those countries must be ensured. Many countries have already got some cars from Tata, many of them have placed their order and some of them are just signature a contract. All most all countries are keen to get a low priced car. Tata Nano will be available in every where after its official launch. There are evidence to have Tata Nano cars or placing orders in India, USA, France, Netherlands, Germany, Australia, China, Japan, Thailand, Srilanka, Pakistan and some other countries.
• Process: The data will be collected mainly from the internet. There are lot of news, articles, criticisms, discussions and writings available in internet regarding Tata Nano. These data collection process will be guided through the needs of information regarding the countries. After collection of data the data will be analysed and get proper evidences which will help evaluate the countries.
• Collect Data: Collected data are analysed and specified accordingly. The countries which have the highest interests and highest ability to have Tata Nano’s operation are assessed and selected.

Features of Tata Nano Suited with Selected Countries

Due to recent economic downturn and recessionary impact Tata Nano is receiving orders from developed countries like US, Europe, Middle East, Canada and Australia; but as lower engine power and no resell value, it couldn’t sustain with the renowned brands. Moreover the roads and transport infrastructures of the developed countries are fit for higher engine power brands. Meanwhile when the developed countries would overcome the recessionary impact, people don’t like such a car like toy and the present market demand for Tata Nano in developed countries may not exist. Thus the right entry for Tata Nano should be those countries that are geographically near to India and has high population with developing economy line –

• Bangladesh
• Pakistan
• Nepal
• Sri Lanka
• Thailand

Techniques used

Uppsala Model

This is a technique to focus on the individual firms. Here the geographic conditions are assessed to select geographic markets. These geographic segments are aligned with market entry modes such as licensing, franchising or direct investment. Then the purposes of the firms are matched with the implementation.

In this case the selected countries have different geographic aspects which will help to introduce Tata Nano. Bangladesh, Pakistan, Nepal, Sri Lanka and Thailand all have differences in their own geography. The level of commitment of Tata is analysed and the direct investment is possible in these countries. Besides, these countries have close business relation with Tata. The experience of operation in those countries will help to Tata Nano a success.

Network Theory

Network theory implies that the informal relationship within the firms. This relationship is a flexible one based on exchange relationship. This theory says that firm’s ability to become successful is controlled by the resources of other firms. This relationship is occurring internationalization of business and marketing programs.

Tata Nano has intimate relationship with the firms of selected companies. Tata is operating in these countries for several years. And in this long run they have close network relationship with Tata. These firms are not only automobile firms. But also other firms which may become a key customers of Tata Nano. In the market of automobile of these countries, low cost oriented business gives the opportunity to TATA to become the leader in the market.

Criteria of Good Market

There are several criteria for good market of buying and selling cars. These international markets, which are chosen before are analysing with the factors of good market.

• Comparable to Home Country: Tata Nano is promoting Nano Europa in Geneva Motor Show in Europe and UK. When the Tata Motors’ Nano is exported, numbers of standards are improved like wheelbase, engine, and new interiors and exteriors. And at the same time, price will also differ, where in UK, it will costs US$ 6000 mark.
• Benchmark to Country: Tata Nano can be measured with the comparison of it with other same level produced cars in many features. A list of compared table is given below:

• Not for Un-made Roads: In Indian market, 250,000 Tata Nano cars are produced annually with the hope of potential market of Latin America, South East Asia, and Africa, and are also trying to capture Europe and US market. As, the car is too light to drive, it is not suitable for un made roads, as having the fear of full frontal car crash, which has been tested under European Standards. So, it is an alarming issue in Indian environments.
• Urban Car: Tata Nano is declared itself as comfortable, safe, well-weathered, high fuel efficiency, low emissions, which are best suited as the car of Urban People, what they want from any cars. It is called people’s car, which is safe, affordable, and having private transport for also middle class people.
• Price of Patrol: As the price of Tata Nano is become the least price for not only India, but also all over the world, but the price of patrol is not becoming less. It is getting higher day by day. The costs of patrol are showing with the help of two tables:

• TATA is less published compare with BMW: Tata Nano is making international attention only with $2500, then other automobile companies, like BMW which is already exported cars in India, is considering small car in the market with higher prices, equivalent to 20 Nanos But BMW get preferred because of having brand name itself in customers’ mind.
• Key Competitors: There are many rival car makers of Tata Nano, which has concerned on the attraction of middle class people, like:

• Imported and Sold Cars in Year: In Tata Motor Groups, it has 50,000 units of production capacity of Tata Nano annually. They also plan to increase the capacity up to 2.5 lakh to 5 lakh units. It is estimated that, Tata Motors imported Tata Nano 120,000 to 500,000 orders every year worldwide.
• People’s Behaviour in Changing Cars: In India, 4,000 people are changing their cars annually. There are three main reasons to changing cars of individuals, these are:

  • Availability: When the car prices and features of cars are available and simulated to individual, then they feel of need to change their cars.
  • Anchoring: When the policy of Government and choice of options within competition, then people are changing their cars.
  • Scarcity: When people feel the need of scarcity of transportation, then the changing their cars.
• Buying Behaviours: Buying behaviour is the involvement of people’s buying and using cars for personal, psychological or social purposes.

  • Personal: The demographic factors like age, sex, family conditions and regions are driven the personal buying behaviours.
  • Psychological: In this stages, motives, perceptions, personality, attitudes, ability, knowledge, and lifestyles of individual affect on buying behaviours of cars.
  • Social: In this, opinion leaders, family influences, reference groups, social class, cultures and religion derives to buy cars.
• Number of Cars in Each Household: Most of the upper class people have successful in having their mobile transport with high brand consciousness. But now middle class people are affording personal cars. In each year, numbers of cars are increasing 12% in India.
• Popularity of Public Transport: There are various ways of transportation, some of them are popular, and some are not popular in urban area. But these ways can be rivals for Tata Nano, which are:

Analysis of 4P’s of Tata Nano

In the selected countries, the business success of Tata Nano can be analysed with the 4P’s and these are:

• Product
• Price
• Place
• Promotion

Product Analysis

• Core Benefit: The core benefit of Tata Nano is to get the facilities of a car in a lower price. People who are not ready to spend huge amount of money to buy a car can get the benefit to have a car in the lowest price. Besides, the features of the car are also means quality.
• Tangible Product-Augmented Product: The features of the car will exceed the customer expectation. This is a low priced car therefore customer may have the little expectation. But, the design and features of the car is better. So, Tata Nano has the potential to become an augmented product.
• Standardisation of Car: There are some rules and regulation regarding marketing a car in these countries. Tata is following these logistics carefully. For these the car will attract the customers as a legal offering.

Price Analysis

• Value to Customers: By Tata Nano, people are having car in low price is the value offered to the customers, and it provides high quality product in low price to the customers,
• Branding of Car to Buyer: Tata Nano already has brand awareness among the customers.
• Factors Influencing Price:

  • Taxation: As the price is low, customers will have to give low tax
  • Affordability of Transportation Costs: Low
• Competitive Nature of Market:

  • Use of Market Pricing: TATA can use market pricing to further reduction of price
  • Lower Price of Car: Tata Nano is the cheapest car in the world therefore customers are treated Tata Nano as the most inexpensive cars compared to the competitors.

Place (Dealership) Analysis

• Finding People’s Desired Cars: From Tata Nano, peoples are finding their desired cars with low price regulated by Government.
• Car Supermarket: There are several car supermarkets available in India, and other regions. Tata Nano can also have their personal supermarkets as Tata Motors.
• Availability of Cars: In Indian Market, initially, Tata Nano is launched 100,000 cars. In future, they are going to promote 2.5-5 lakhs in domestic and global market.
• Finding of Expensive Cars: In India and International market, BMW, Ford, Toyota, Ferrari, Mercedes, Harrier, Prado etc are most expensive car ranges. To beat them up, Tata Nano is introduced least expensive car in car market.

Promotion Analysis

• Tangible: Media and network advertisements, news papers, and market promotion like trade market are the most important tangible sources of promotion by Tata Nano.
• Intangible: Tata Nano can build up customer relationships and post purchase facilities, like warranties are the intangible promotional tools.
• Advert: Tata Nano has to be promoted to its potential customers like middle class people as in many options, like first and only car of them, or otherwise second or family car of them. Every opinion of advertisements should be build up by it.
• Using of Products: There are many other materials needed to using a car. These materials should be available in the car market and to customers.
• Use of Car for Different Reasons: There are different reasons to use Tata Nano cars, which are, personal uses, professional uses, affordability, enjoyable, privacy maintenance, friendly to environments, less expensive, cost effectiveness and many more.
• Personalisation of Car’s Fashion Trend with Life Style: Tata Nano becomes a fashion trend to middle class people instead of riding local transportation.

Conclusion

Tata Nano is successful to attract the people of the world, who are proud to ride a bus and poor to buy a car. People who want to have a car but don’t have enough money will take this opportunity. The number of these types of people is high in the world. So, the success of Tata Nano is a matter of time and also upgrades the status of middle class comforts with their dreams come true.

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