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Marketing Mix of Nano-USA
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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
Under 18 years of age 18.0 18.1 17.5 15.7 15.6
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
Under 18 years of age 18.0 17.8 16.3 16.1 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
Outside Factors and Marketing Environment
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
Outside Factors and Marketing Environment
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
Outside Factors and Marketing Environment
Lial
Product Life CycleProduct Life Cycle
Outside Factors and Marketing Environment
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
Promotion Techniques
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
Promotion Techniques
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
Strategic Alliance: Nissan Motors Canada
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
Strategic Alliance: Nissan Motors Canada
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
Strategic Alliance: Nissan Motors Canada
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
Timeline for Success
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
Timeline for Success
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