Globalization and technological advancements have made the market place highly competitive and complex. The customer's needs, wants and desires are changing with each passing moment and this poses a great threat to the companies who are to keep pace with the changing scenarios. To sustain, effective brand positioning strategies are required. Positioning allow customers for product differentiation so that they can choose the appropriate product for themselves. This case study of Tata Nano identifies the pitfalls and shortcomings of their prevalent positioning strategy of “People’s Car” and suggests ways in which Tata Motors could reposition ...view middle of the document...
Hence it becomes essential to consider and improve the local transport system along with providing better personalized transport facilities. This strong middle class demands more houses, more cars, more oil, and more gasoline. So efforts need to be made to optimize the use of the natural resources.
What is “Positioning”?
Kotler defines positioning as: “the process of designing the company’s product/services and image based on consumers’ perceptions relative to that of competitors”. Arnott states that Positioning is the deliberate, proactive, iterative process of defining, modifying and monitoring consumer perceptions of a marketable object. In other words, positioning involves actions and decisions at a strategic and operational base which reflect the intent of the company, and its impact to its competitors and industry sector as a whole. There is a need to develop specific attributes which are unique to the product and to the product user.
The product can be a leader in the market, when the product attributes are coupled with marketing efforts.
Figure 1. Value disciple model (Treacy & Wiersema, 1993)
Creating Brand value and then Positioning
Customer insight and behavior are essential for any company to effectively positon its product in the market. The same is true for the TATA NANO. The dice was rolled long before the so called /affordable small car segment was brought to reality through manufacturing. The one particular ‘auto expo’ event where the Tata Group legend Ratan Tata drove into the glitzy ceremony in a prototype Nano model set the ball rolling in creating the much talked after hype and buzz on this particular car. However, long before that event, there were specific consumer indicators which pointed towards a huge potential of pent-up demand for such a car. Before Nano, consumers’ choices and perceptions were being largely driven by the following factors:
* The lowest costing small car till then was the Maruti 800 (and its different variants), which came at a price of about 2.5 Lakh
* Therefore, though affordable but still unviable from a price point of view to the large demographic section of people who wanted to replace their old two wheelers for better safety and comfort
* Till then, car was largely being considered as a luxury purchase which comes at a high premium. That it could also be driven by the less economically privileged section of the society was being perceived a myth than a reality
* A possible ‘cheap’ car was thought about with much speculations - safety, compatibility and comfort being the primary concerns in such a car
Tata acted exactly on these specific perceptions to create the ‘Nano’ brand values. What followed were the following:
* Car launched at about the price of 1 Lakh, therefore bringing it within the reach of 2-wheelers and the “never thought about riding a car” consumers
* In as much as its competitive price-point, much stress was also laid...