Tata Motors' Nano strategy was flawed, say experts

Ketan Thakkar, ET Bureau Dec 30, 2013, 03.17AM IST

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MUMBAI: The strategy adoped by Tata Motors to promote Nano was badly flawed, say brand and
marketing experts, albeit with the benefit of hindsight. The Nano generated tremendous publicity for itself
as the "world's cheapest car". While that created headlines, it wasn't the sort of communication that
necessarily sold cars.
The messaging could have been more proactive in the initial phase of the launch, experts said. As it could
have been when the project had to beat a retreat from the Singur factory site in West Bengal or when
some cars began catching fire.
"A series of factors has impacted the Nano, right from the Singur issue to cars catching fire to clumsy
marketing strategy," said Autocar India editor Hormazd Sorabjee. "There was a bit of overconfidence at
the start and not much marketing push from the company. The hype fizzled out even before Tata Motors
could effectively roll out sizeable (number of) cars on the road."
A pers

on close to the company said, "Somehow it got slotted as a Rs 1-lakh car or a cheap car.

Tata Motors did not intend to position it like that, but they did not do enough to manage perceptions."
Making too much of the price tag was a mistake, said Zia Patel, principal at leading international brand
consultant, Wolff Olins, and head of strategy for India.
"The value engineering and innovation was brilliant. But it was never quite clear who the car was for. Was
it to replace a two-wheeler for commuting, was it a second car for an affluent family or an aspirational first
car for a 30-year-old, or was it for all of these people?" Patel said. To be sure, even Mercedes had two
false starts before getting its pitch for the Smart car right.
A company spokesperson agreed that the Nano became a victim of its own hype. The marketing pitch is
now aimed at breaking that image and giving the brand a more emotive personality as a mobility solution,
a smart city car. The Nano Awesomeness ad campaign is a step in that direction.

The ad video seems to have been popular with more than 3.7-lakh likes on Facebook and more than
20,000 comments. The TV commercial got 5-million views on YouTube in less than 30 days of being
aired, the highest for any automotive brand TVC in India.
The 'smart city car' idea arose from talking to car owners. "Owners have told us in several feedback
sessions that they enjoy spinning it out of traffic. The car can be parked very easily, it has good visibility,
there is tremendous driving pleasure," the spokesperson said. The company also wants to take
advantage of India's rapid urbanisation.
"The whole thing about being smart, leading a city life is no more limited to metros, it has gone beyond
that," the spokesperson said.
Jack Trout, international brand strategist and a pioneer of the 'positioning' theory, recently told ET that
Tata Motors should kill the Nano brand. "Why hang on to a badly damaged brand? If they want to do a
city car, give it a new name rather than offer a new Nano. It's an obvious solution," he said.
Patel disagrees and points to the success that Tata Motors has had with turning around Jaguar Land
Rover. "We Indians love to beat ourselves up.
This is Tata, the people who turned around Jaguar where Ford had failed. The way they turned Jaguar
around is they re-created the emotion around the car and of course sorted the engineering," Patel said.
Still, she has her own views about pitching the Nano as a smart city car.
"It is hard to imagine a re-speced Tata Nano as a solution to the nightmare of Bombay or Bangalore
traffic. So it is not a replacement for a twowheeler that zigzags and zips. But it could very well be a
second car or a personal statement. Maybe the Nano should be less Smart (functional) and more Mini
(personal statement)."

Ratan Tata Reveals The Reason Why Nano Failed!

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Ratan Tata has finally revealed the reason behind sluggish sales volume of Nano: It
is none other than the term which is synonymous with Nano The cheapest car.
Buying a car in India is associated with social status and prestige; if a person owns a
car, he is assumed to be successful and settled. It differs hugely from the Western
market, where cars are more of a necessity rather than luxury. If a person buys a
car in US, no one gives a damn unless its a Ferrari or Lamborghini.
Indian market is different, and a different marketing strategy was required for
selling Nano, which is arguably worlds cheapest car. But the word cheap in its

marketing campaigns spoiled everything. It had to be subtle yet hidden from the
promotional messages.
Something terribly went wrong here.
He said during an interview with CNBC,

It (Nano) became termed as a cheapest car by the public and, I am sorry to

This single statement sums up everything which went wrong with Nano. It was a huge PR
and Marketing mistake by Tata.

Nano was launched in the year 2009, and it has never witnessed a positive growth
in its overall sales. Last quarter ending September, 2013, its sale plunged 74%
compared to last year, as only 10,202 units were sold in this period. And previous
quarter ending June, 2013, the sales went down 88% as only 948 units were sold in
the month of April, 2013. Last month, in October, its sales were down
28% compared to last year and the trend will unfortunately continue.
It is not that they are not trying. They tried to highlight the feel good factor by
introducing awesome videosand started exporting to Sri Lanka, Indonesia, Thailand

and Africa. But the results were again dismal. In fact, in the month of April, 2013,
they couldnt even export one single car!
After Cyrus Mistry took over the reins of Tata, he tried to reintroduce Nano as
a Smart City Car, for enticing young urban population and those with less space for
parking. They even invested a fresh capital of Rs 3000 crore into this loss making
product. But the results arent suggesting that the sale will pick up anytime soon,
especially as the whole automobile sector in India is witnessing a negative growth.
What is the solution?

Branding guru Jack Trout suggests, Kill it, shut it, forget it.
He said, People dont want a cheap car, which their neighbors can see. Especially
in India, theres a prestige theres a prestige thing about buying a car. Tata Nano is
hard to save, I would kill the brand.
But Ratan Tata as of now is still hopeful that Nano will revive and will become the
best selling Indian car in near future. No doubt his intention and ambition to
provide low cost, affordable and functioning car for the mass middle class is
appreciable, but the strategy he adapted to implement his dream backfired. He
must realize that India is now very close to shed its developing country mode and
Indians want a class associated with anything they buy.
As of now, he plans to re-launch the car in some other country, and then bring it
back to India under some other name or brand.
As he shared in the interview, Maybe it (Nano) gets launched in another country
like Indonesia, where it doesnt have the stigma and the new image comes back to
India. Or maybe as a changed product that gets marketed in Europe. Theres a lot of
interest in Nano outside India.

We hope that this latest branding technique works for Nano, and people actually
embrace the idea. But for time being, it seems that Nano is still way too far from
success.

What do you think of Tata Nano?

What went wrong with the Nano? And what must

Tata Motors racked up over 2,00,000 fully paid bookings, which with limited capacity translated into a
potential four-year waiting list, at worst. The company could sell everything it made but just months before
the Sanand plant was ready for full scale production, the highly-publicised incidents of the Nano catching

fire battered the cars reputation. After touching a high of 9,000 units in July 2010, sales have since fallen
off a cliff to a shameful 509 units in November 2010.
What went wrong? Its a combination of many factors. The plant relocation messed up schedules and with
the long-drawn-out rollout and even longer waiting lists, potential buyers began to lose interest. Also, the
first round of bookings became a lottery for many and hence it was hard to gauge the true demand for the
car. The booking system alienated many genuine buyers who could not buy the car. The company
opened sales in select States only a year later. Till now, sales are open in only 12 States.
However, its the spate of fires and the horrific sight of a Nano ablaze that is mainly responsible for
scaring buyers away. Tata claims to have identified the cause of the fires and has introduced a raft of
modifications and upgrades to sort out the problem. Some advertising experts say that Tata has been
complacent after the huge bookings it received and didnt implement a comprehensive advertising
strategy to keep the Nano brand pumped up. But after the problem of fires and falling sales, advertising
has been reactive.
There are other softer factors which Tata did not bargain for. Many potential Nano customers want the car
but dont buy it because they cant drive! Tata should have foreseen this by taking a leaf from Marutis
book. To tackle this issue, Maruti has heavily enlisted a lot of its first-time customers into Maruti-supported
driving schools. Besides, many potential Nano buyers were not creditworthy and hence could not get
loans.
This leads us to a larger question. Does Tata Motors know who the Nano customer really is? Tata is
addressing an entirely new segment of people who never considered buying a car. This new segment, in
which the Nano is the only player, will take time to develop. However, the Alto's record sales, helped in no
small measure by the Nanos recent price hike (a cardinal mistake), suggests that if people can afford a
not-so-one-lakh Nano, they dont mind spending a bit more on a tried-and-tested product.
However, one should not write off the Nano based on a few months of sales. These are very early days
and the entire might of Tata Motors is behind this car to ensure its success. The company needs to
quickly bring a Nano V2 with all the changes and improvements that have been on the anvil. Bringing
forward the diesel launch would help too.
What Tata Motors has in its pocket are thousands of satisfied Nano buyers. They love the cars space and
fuel efficiency, which the Alto cant match. If no more Nanos go up in flames, theres nothing better than
positive word-of-mouth to restore customer confidence. The recent 4-year/60,000km warranty will also
help. It may be a long haul but we wouldnt be surprised if the Nano does emerge from this mess to
eventually take its natural place on the sales charts.
- See more at: http://www.autocarpro.in/industry/wrong-nano-tata-bring-track-4484#sthash.Dx9r5NXH.dpuf