Situational Analysis
Justification for the Brand and Chosen Market and Campaign Proposal
Tata Company Limited is one of the largest automotive firms in India. With successful products in the compact, midsize, and utility vehicle sectors, it ranks among the top three in passenger vehicles and is the market leader in commercial vehicles across all segments. The business is the second-largest bus maker and the fourth-largest truck producer in the world (Parsad et al., 2021).
In India, there are frequent issues with accessibility and quality of mass transit. Tata’s innovation, such as identifying the new product (Nano), has helped the company attain a large market share (Mukherjee, 2021). Nano’s development could help improve the automotive industry by enhancing safer transportation services. Tata Nano was to be provided in Malaysia, with one of its goals being to develop into a multinational Indian commercial empire.
Key Findings
The findings on the introduction of the Tata Nano are based on a market analysis of Malaysia in terms of the automotive industry. When introducing a new product into the market, it is essential for the company to critically evaluate and analyze both the internal and external environment of the targeted company (Phadnis et al., 2018). The market can be evaluated in terms of the potential customers, positioning of the new product, demographics, geographic environment, and level of completion.
The Market Summary
The market is based on the number of potential customers in Malaysia. Compared to its over 4 million motor vehicles, Malaysia is thought to have more than 5 million motorcycles on the road. Most motorbike buyers and users are from the lower and moderate-income brackets and do not possess cars. In Malaysia, men make up a substantially higher share of motorbike users. The product’s primary USP was its affordability. The most ambitious project for the brand was Tata Nano (Devakumar V & I, 2019). It was made of steel, was compact, light, and lacking in luxuries to be cost-effective. Nano has never aimed to rival other automakers (Sushil & Garg, 2019). Modern families were drawn to the vibrant colors, and the roomy interiors provided comfort. Proton, Perodua, Toyota, and Honda are the primary rivals.
Customer Response to Tata Nano and Competition
The customers’ response to Tata-Nano products was negative as the product sales went down. The impression left in the minds of its intended audience is a crucial factor in Tata Nano’s failure. The threat of piracy and terrorism will remain in the waterways and shipping corridors that surround Malaysia. Malaysia could lose out to China in the competition for foreign investment (Alagappan, 2018). Other automotive companies also started targeting the Malaysian market, making the success of the Tata-Nano product difficult.
The Organization’s Strategic Pyramid
The success of the Tata-Nano product could be attained by adopting SMART objectives in its operation. With smart objectives, the organization is responsible for ensuring that goals set for the product are specific, measurable, achievable, realistic, and time-bound. The first objective of the new Tata-Nano product was to achieve more than 25,000 units of sales (Sarmah & Datta, 2021). The objectives could be achieved based on the efforts of different departments of the company, as presented in the organization’s pyramid strategy.
The company’s business-level strategy (as per Figure 1) is focused on how it can compete and gain a competitive advantage. Therefore, the company could market its product as cheap and favorable to middle-income persons. The functional strategy was enhanced by the company’s involvement of different departments, such as HR, finance, marketing, and R&D, in formulating its objectives and sales. The ultimate sales of the company can be attained through functional strategies (Sarmah & Datta, 2021). However, when formulating a corporate-level strategy, management must take into account how to obtain a competitive edge in each of the business lines the company is engaged in and which business lines the firm should be engaged in.
Segmentation, Targeting, and Position
Bases of Segmentation Used
Market segmentation involves splitting the customers based on the observable sections in the market, which can be the potential buyers of the products. Segmentation for the Tata-Nano product was based on demographics, geography, and psychographics (Mukherjee, 2021b). Effective market segmentation could help the company attain a competitive advantage in international trade (Dolnicar et al., 2018). The targeted market size is large, making it possible for the company to attain more sales.
Demographics and Geographic Segment
Tata Can categorize its consumers into three groups based on geography: Asian, African, and North American. Tata can divide its clients’ income levels into three categories based on their demographics: top, middle, and lower. Another demographic factor that can be used to classify the clients is their age (D’Angelo & Magnusson, 2022). The population of the targeted market segment comprises 90% of men who have families and are of a medium class. Customers can be categorized as either young or old, depending on their age.
Psychographic
When examining consumers, psychographic segmentation is used to categorize individuals into groups based on psychological traits such as personality, lifestyle, social status, activities, interests, opinions, and attitudes. The company’s primary market segment comprises people with a lower social status (D’Angelo & Magnusson, 2022b). The attitudes of the targeted customers were based on buying affordable cars that could help them travel with their family members. The lifestyle of the people who could be using the Tata Nano products comprises people who are starting life.
Justification of the Chosen Segmentation
Market segmentation played a vital role in the attainment of Tata-Nano products. Because it is tough to make the payment, individuals do not put off buying a Tata Nano. Consumers’ purchase decisions are timely because of price. Two things are causing individuals to put off buying a Tata Nano. The Tata Nano is a low-cost, four-passenger city car with a rear engine made by the Indian business Tata Motors with the Indian domestic market in mind. The affordable price of Nano is one of its best features.
Customer Analysis and Buyer Behavior
The Buying behavior of a given market segment helps the organization attain optimal sales. The buyer behavior of the customers comprises the need for recognition of the product, capability on information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. The demand for safety drives 68% of car purchases (Malhotra, 2022). Concern about respect drives 24% of car purchases. 8% of people purchase an automobile due to a basic need. The price of the Tata Nano is well known, and 100% of respondents said they were aware of it (Dr. M. Nasrin Sulthana, 2021). People’s reactions to aspects like engine power, mileage, and safety are mixed, and this shows that the firm needed to pay more attention to how to communicate the features.
The Value of Position
The Tata Nano will market itself as the most affordable car in the world while maintaining high standards for quality, safety, and environmental protection. The competitive advantage of Tata Nano, which comes from the parent business Tata Motor, which has been in the transportation sector (commercial, passenger, and utilities) since 1945, will be used to achieve this positioning (Bhattacharjee, 2022). With more than 100 components, Tata Motor enjoys positive relationships with its suppliers and manufacturers.
How the Strategy Will Meet the Needs of the Chosen Segment
This paper’s recommended strategy involves providing customers with unique products with favorable prices. The products being supplied need to be differentiated from the other items supplied in the market to satisfy the customers’ specific needs. The prices of the product will be for customers in a way that low-income and media-income earners will be able to afford to buy the Nano brand. Therefore, the strategy will be aligned with the market segmentation to increase sales.
Recommendation
Product
When formulating a marketing strategy, the product is crucial as it helps create the company’s brand, hence making it possible for the firm to attain a competitive advantage. The competitive environment in the automotive industry creates a need to innovate unique products that would help market the company in the global market (Costa et al., 2021). Some of the product strategies that could help increase the company’s sales are Porter’s strategies, such as the differentiation approach. The products produced by Tata Automotive should be differentiated so that the company can gain a competitive advantage and attain an effective market segment.
Product Review
The Nano line includes three different models: “Nano,” “Nano CX,“ and “Nano LX“ For the initial stage, only the Nano CX model would be made available in Malaysia. Tata Nano LX would be released in the Malaysian market the following year. The product details and features include the 623cc, two-cylinder engine and four doors (Hossain, 2021). When promoting the goods, it will be stated that the car lacks equipment such as a radio, CD player, airbags, an air conditioner, a trunk door, and power steering.
The Unique Features of the Product
Product differentiation will help the company increase its sales in the local and international markets. When launching a new product, Tata-Nano, the management has to ensure that the new car models attract many customers. The first unique feature that can be considered when introducing the Tata-Nona brand is long-lasting and fuel-efficient engines. This is the first time a two-cylinder gasoline engine has powered an automobile with a single balancer shaft.
Another feature that will ensure the product being launched is unique, stylish, and comfortable. The spacious passenger compartment of the Nano Car, created with families in mind, has plenty of head and leg room. Four people can sit there comfortably. Four doorways provide easy access and exit with high seating positions (Parsad et al., 2021b). Its mono-volume design, which places the power train at the back and the wheels at the corners, allows it to combine room and maneuverability in a way unmatched by other tiny cars.
The Nano product should also meet the customers’ safety needs at the local and international levels. The ultimate goal of marketing is to ensure that all customers’ needs are fulfilled to the fullest. The safety performance of the Tata-Nano Car surpasses the standards set by the law. With a body made entirely of sheet metal, it has a sturdy passenger compartment and is equipped with security features, including crumple zones, doors impervious to intruders, seat belts, sturdy seats, and anchorages.
Branding of the Product
Brands help consumers or businesses—assign blame for a product’s performance to a specific manufacturer or distributor by identifying the product’s maker or supplier. Giving goods and services the strength of a brand is branding. The goal is to distinguish products from one another. Consumers must be persuaded that there are noticeable differences between brands in the product or service category for branding tactics to be effective and for brand value to be developed. The firm name gives the new product legitimacy, while each person’s name gives it individuality.
Pricing Strategy
Pricing strategy is one of the 4 Ps of marketing strategy that plays a vital role in increasing product sales. In marketing, product strategy is enriched by setting prices for such products. When setting the prices, the management should embrace three major objectives: survival, maximum current profit, and attainment of the maximum market share (Bodendorf et al., 2021). Survival in this situation is a temporary goal because Tata Nano will eventually enhance the Nano range’s worth by adding safety features. Following evaluating the market demand and associated costs, Tata Nano has established pricing that would maximize current earnings, cash flow, and return on investment.
The Tata Nano will have an entry price of roughly $6000 in Malaysia. Since the export variant of the Tata Nano will cost between US$5,500 and 6,000 when it is sold in Malaysia, it is a rather affordable offer for a new car in that country (Verma et al., 2019). The popularity of the Tata Nano will be increased through advertisements and product promotions. As a result, many members of Malaysia’s urban working class can purchase brand-new vehicles for practically the same price as a used vehicle. Customers who spend more than $3000 on their first installment will receive hire-purchase terms from a few auto dealers.
Promotional Strategies
Before deciding on advertising techniques, we must be crystal clear about the goals we must accomplish. We know that one of our goals is to improve quarterly sales and promote Tata Nano in Malaysia. The Tata Nano is a brand-new automobile for Malaysians, giving them a sense of newness. Beginning in July 2009, Tata Nano will be available in Malaysia (Sharmelly & Ray, 2021). Therefore, the primary goal of marketing tactics is to increase consumer understanding and brand awareness of the new Tata Nano. The world’s cheapest car quickly gained popularity on the global market.
Promotion Tag Line
The promotion tagline is one of the strategies that can be adopted when advertising a business operation. For instance, the effective tagline for Nano products is “Getting quality Tata-Nano for paying less‘” The established tagline can be easily remembered by people hence playing as a marketing strategy for the company. Tata Nano is safe, allowing you to travel anywhere with your family or friends while having fun, but you only need to pay for all of this at a reduced cost.
Advertisement
There are several forms of advertisement that can help Tata Nano in attaining a large market share. The first strategy is an online advertisement, whereby the photos of the new product will be uploaded on the company’s website and social media platforms. Blogs, which are often updated online diaries, have emerged as a key channel for word of mouth. People with similar interests are meeting thanks to blogs. Since many internet users read blogs, they vary widely and can affect a sizable readership.
Television, Radio, and News Paper Advertisement
Although pricey, television advertisements are the most effective way to sell the Tata Nano to the public by highlighting its features and persuading viewers of the advantages it offers consumers. A well-executed TV ad can increase brand equity, impact sales, and boost profitability. Radio advertises because the majority of people listen to it. These days, people have access to various amenities, including MP3 players, mobile phones, and other devices that make it convenient for them to listen to the radio whenever and wherever they want. By repeatedly hearing brand names and advertisements, we may raise awareness of our brands. The majority of Malaysians also read a newspaper daily in addition to listening to the radio.
Channel/Distribution Strategy
The distribution strategy and positioning are essential for the growth of the product’s brand. The distribution channel taken to supply the Nano product will highly influence the income generated by the company from the new brand. Some of the proposed strategies that can help boost the sales of Nano products comprise direct marketing, physical flow, payment flow, information flow, and promotion flow. The distribution strategies will help the customers get the process by which the Tata Nano product is distributed.
Direct Marketing Channel
The distribution of the product in Malaysia can be done by selling directly to the customer. Customers can make Tata Nano reservations directly with our dealers by visiting our sales office or at each unique campaign or event. In addition, customers can obtain information or make reservations over the phone and online. Instead of using retailers or resellers, we may keep the purchase price low and save more money. The direct marketing channel can be presented in Figure 2 below.
Physical Flow
From Figure 3, it is clear that Tata Nano will ship the routes to Malaysia once the sales office has placed the order. At the workshop, we will then put together an automobile. Send it immediately to the customers to finish. Because we are closer to the clients from here, we can frequently deliver goods to them more quickly.
Payment Flow
Customers have two options for paying their bills: cash or bank borrowing. As a result of Using this design, customers spend less because there is no need to pay additional commissions to other parties like wholesalers or merchants. Additionally, Tata Motors can more effectively collect payments as presented in Figure 4.
Information Flow
Customers can obtain information about new products, pricing changes, and other topics directly from Tata Motors, as presented in Figure 5. Tata Motor can better understand their demands when receiving consumers, either by answering calls and emails or through an internet blog. By dealing directly with customers, we can instantly address their needs or complaints.
Promotional Flow
Customers have both direct and indirect means of promotion when using this channel as presented in figure 6. The company can immediately set up the roadshow, event, and marketing campaign. This will allow us to personally introduce Tatanano to our target market and give them a chance to test drive the vehicle. Through media like the internet, TV, radio, and newspapers, we will market in indirect methods. Using this promotion strategy, Tata Motor hopes to raise brand awareness and boost sales in Malaysia.
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