The Model T for the 21th Century ?

1. The Model T for the 21th Century ? TEAM RAM Rita Chen Anja Ritek Michel Sung

2. Question 1 • Does the so called one lakh car really have potential beyond India ? What criteria should Tata motors use deciding which countries to enter ? Should Tata also launch the Nano in developed countries ? Why or why not ?

3. Answer

4. Answer The Tata nano have potential beyond India. To succeed to conquer international markets, Tata must consider aspects that developing countries consumers value as confort, safety and design for example in developing countries. Moreover the car must be adapted to the country targeted, specially in terms of security. Ex : As we can notice, there are no airbags. Regulations in some countries may reacquire this. Tata nano should consider country where the sells of compact car, smart and even no driving license car and other small cars are sold the most, indeed it represent a potential market as a substitute product. Tata nano can also target countries where consumer car are not necessary a way to show off wealth. In fact, attitute towards car are important. Driving a small cheap can be shameful for consumers. Tata nano should launch their product to developing countries. In india, the rich part of the population bought the car as secondary car or for their children. This consumer behavior might be suprising but this can be transposed to developing countries. With a improvement of the car in terms of comfort and safety, and a better marketing strategy that correct the image as a “cheap car”, the potential market may exists. Consumers in Big cities with parking problems may find Tata Nano cars useful.

5. Answer • Tata nano can consider not to launch their product in developed countries because the cost to add those feature in production line in terms of module might be expensive. • Adding those features as comfort and safety might be costful. Price will be higher. The positioning of the car have to be changed according to the price. Even if the price is higher it shouldn’t be higher than the average price in the small car market segment if they want to price as the competitive advantage • The need may not exist developed countries. The car might not respond to any need and potential market might not be big enough. • Distribution channel is a problem. In fact, as Tata have subsidies in luxury segment, it might be problematic to sell the car trough the same channel. • In addition, cost of owing a car is expensive in Europe for example and trend shows that household cut back to own just one car.

6. Question 2 • What challenge to you envision in launching the Nano ?

7. Answer • Challenge will be in terms of production, because it will require several adaption to developed countries. • Tata nano image must change his image as a “cheap car” because : who would like to be seen as driving the cheapest car in the world ? • Tatonano have to face the competition in the segment their targeted. Many car constructor plan to launch cars with the same positioning as Renault. In the french market, it is an established brand. Consumer might prefer this brand to “Tata nano”. • The country of origin effect : INDIA is not and advantage in terms of safety and comfort. Attitute and perception must be changed with high communication budget and product development.

8. Question 3 • How should the Nano be positioned ? Would you apply the same positioning strategy in, say, India and Germany or would you adjust it ? If so, why and how ?

9. Answer • Tata nano should be position as a low cost car as Dacia (Romanian car own by Renault) successfully did. • In India, sales after the launch of the car dropped and were low because of the image of “cheap” car. Cars for Indian are important, thus they like to be proud when they drive it. This was not the case. The image must be changed. • The positioning in these two countries must just be adapt. The overall need cover is the same, the only variations are basic features that cannot be removed from a car relatively to German people