Failure of tata nano

The Failure Story Of Tata-Nano

TAMIL NADU NATIONAL LAW

SCHOOL

THE FAILURE STORY OF NANO

SUBMITTED IN THE PARTIAL FULFILLMENT OF B.COM. L.L.B (Hons.), SECOND SEMESTER

Submitted to: PROF. P. Murugesan

Submitted by: Karan Kumar Khetani

Registration no: BCO140026

1 | P a g eAll Review of literature articles have been studied from Online ISSN 2320-0073 VOL. 3, ISSUE 5 (May 2014).


SUPERVISOR’S CERTIFICATE

This is to certify that the Project Report entitled: “Failure Story of Tata-Nano” submitted to

the Tamil Nadu National Law School in partial fulfilment of the requirements for B.COM. LL.B

(Hons.), second semester is an original and bona-fide research work carried out by Karan

Kumar Khetani under my supervision and guidance. No part of this study has been submitted to

any University for the award of any Degree or Diploma whatsoever.

______________________

PROF. MURUGESAN



PREFACE

This project is intended to carry out an extensive research on the given topic by the supervisor.

The research and analysis conducted by the researcher is bona-fide and purely for academic

purposes. The borrowed facts, data and opinions presented are from the internet media.

Every effort is made to keep the project error free. I would gratefully acknowledge the

suggestions to improve the project to make it more useful.



ACKNOWLEDGEMENTS

On the successful completion of this project, I would like to thank our respected mentor, our

Business Economics Lecturer, PROF. P. MURUGESAN who despite all of his pre-occupations,

provided me all the assistance I needed for the accomplishment of this project and guided me

while I tread on the tenebrous boulevard of ignorance. Had it not been for his support I wouldn’t

be able to grasp the cognizance of something as enthralling as this. I thank him profusely for

providing me this engrossing topic to work on which helped me to learn and relearn, to explore

and re-explore our knowledge of the English literature.

I also thank our honourable Vice Chancellor, Mr. Murugravel, and our esteemed Registrar, for

their inexplicable greatness to find time to educate us as and when they find an opportunity.

I would like to convey our gratitude towards our friends and batch mates who have rendered

me their valuable time and without their help this project would not have been in its present

shape and form.

No work is complete w

With solo endeavour, neither is mine. I thank each and every non-teaching staff of TNNLS for

their unconditional support and infinitum. I would also like to convey our thanks to the Library

Staff of TNNLS.

I am grateful to The Almighty, who has given me enough strength and blessings to work hard

and make it to the best of our ability.

Last but not the least; I thank my parents who have given me a chance to study in this esteemed

University, a heaven for legal edification.

______________________

Karan Kumar Khetani



TABLE OF CONTENTS

CHAPTER

1......................................................................................................................................08

Introduction..................................................................................................................................

CHAPTER

2......................................................................................................................................13

Review of literature......................................................................................................................

CHAPTER

3......................................................................................................................................19

Data collection..............................................................................................................................

CHAPTER

4......................................................................................................................................20

Data Ananlysis..............................................................................................................................

CHAPTER 5..................................................................................................................................31

Conclusions........................................................................................................................................

CHAPTER 6..................................................................................................................................34

BIBLIOGRAPHY...............................................................................................................................

CHAPTER 7..................................................................................................................................35

ANNEXURE.....................................................................................................................................



TABLE OF GRAPHS

TABLE TITLE PAGE NO

Age group of TATA NANO customers 20

Income group of TATA NANO customers 21

NANO VS BIKE PREFERENCE 22

Feature attracts TATA NANO Buyers 24

No. of Customers who agree that TATA NANO is cheap,

economical, affordable and compact car as compared to other

cars in small car segment

25

How many customers agree that TATA NANO is people’s car 27

Comparing gender group of the customers and usage as taxi of

TATA NANO

27

Comparing gender and will the customers recommend TATA

NANO to their family and relatives

28

Comparing occupation and tendency to purchase after the

price hike of TATA NANO

29



CHAPERISATION

CHAPTER 1

Chapter 1 titled as introduction which tells about the idea on which the research is done,

the research objectives, methodology used and the research limitations.

CHAPTER 2

Chapter 2 titled as review of literature includes the theory on consumer behavior,

scholarly articles by other researchers on the same topic and researchers comparison.

CHAPTER 3

Chapter 3 titled as Data collection states “The Instrument for data collection, in the form

of a ‘Structured Questionnaire’, was designed to elicit information on demographic and

psychographic aspects of the respondents”.

CHAPTER 4

Chapter 4 titled as Data analysis summarizes all the tables and graphs prepared using

IBM SPSS 20.

CHAPTER 5

Conclusion states the juice extracted out of the research and answers of the objectives.



CHAPTER 1

INTRODUCTION

The Tata Nano is a city car manufactured by Tata Motors. Made and sold in India, the Nano was initially launched with a price tag of 100,000 (US$1,600) which was ultimately increased with time. Designed to lure India's burgeoning middle classes away from two-wheelers, it received much publicity.

Expectations created for the car during the run up to its production may have been out of proportion with its realized success. A 2008 study, by Indian rating agency CRISIL, thought the Nano would expand the nation's car market by 65%, but, as of late 2012, news reports have detailed the underwhelming response of the Indian consumer to the offering; sales in the first two fiscal years after the car's unveiling remained steady at about 70,000 units although Tata appears intent on maintaining a capacity to produce the car in much larger quantities, some 250,000 per year, should the need arise.

It was anticipated that its 2009 debut would greatly affect the used car market, and prices did drop 25–30% prior to the launch. Sales of the Nano's nearest competitor, the Maruti 800, fell by 20% immediately following the unveiling of the Nano. It is unknown if the Nano has had a lasting effect on the prices of and demand for close substitutes, however. In July 2012, Tata's Group chairman Ratan Tata, who retired in January 2014, said that the car had immense potential in the developing world while admitting that early on opportunities were wasted due to initial problems.

They said it couldn’t be done. But Tata went ahead and did it anyway. They got out a car that cost lakh rupees. And although the prices have escalated recently due to surges in raw material costs, the Tata Nano is certainly a revolutionary product. The idea for the Nano was conceived sometime in 2003, and the car hit the roads in 2009. It’s been six years since the launch, but has the Nano lived up to its promise as a product? It has. And has it lived up to all the hype? It hasn’t. That sounds a little paradoxical. So let’s take a closer look at this phenomenon.

The idea behind the Tata Nano itself was revolutionary. While the execution hit some roadblocks, the product was an engineering marvel without a doubt. It brought together cost, fuel and space efficiencies in a way like no other while still retaining world-class


http://en.wikipedia.org/wiki/Indian_rupee


features and a sleek design. True, there were a few safety issues (no air bags) and the fire incidents in a few cars. There was also the lack of power, low stability, less boot space and small fuel tank. But all in all, the price tag more than compensated for these.

First, Ratan Tata called a meeting of his top parts suppliers and, after

showing them the early, earnest but flawed prototypes, asked them to help.

Companies including Germany's Bosch, which makes the computer that is

the heart of car's engine, were skeptical. So were local Indian players.

But Tata persisted, pointing out that not only could a company's specific

developments for the Nano help to make history but they could also improve

their companies' businesses and bottom lines. Soon most of Tata's

traditional suppliers were on board.

Rane Group, for instance, makes a rack and pinion steering system. It

focused on reducing the weight of the materials used, replacing the steel

rod of the steering with a steel tube -- a major cost-reducer. Typically, the

product is made of two pieces, but it was redesigned as one to save on

machining and assembling costs.

According to Harish Lakshman, director of the $317 million company: "The

world has seen this sort of integration of two pieces into one, but applied

differently -- not for a new car, and not to reduce costs."

GKN Driveline India, a subsidiary of global auto parts leader GKN, made the

driveshaft -- the component that transfers power from the engine to the

wheel. The team spent a year developing 32 experimental variants to create

the perfect driveshaft for the Nano. It roped in designers from the

company's French and Italian operations and changed the design to make it

lighter and easier to manufacture.

For the Nano's rear-wheel drive system, GKN designed a smaller diameter

of shaft, which made it lighter and saved on material costs. "We thought if

we were successful in this, we could dictate terms to the market, and every

other car manufacturer would want to work with us," says Rajendra Ojha,

chief executive of GKN Driveline India.



Taking the pulse of the project

All the suppliers have similar stories. And although none would disclose

specific cost savings, most stuck to Tata's mandate to cut costs. That was,

as Kant acknowledges, the biggest hurdle for the company -- "then, now,

and in the future," -- particularly as the price of raw materials like steel

have more than doubled in the past four years, and the company has to

follow new, tighter industry regulations.

Kant, who recently led negotiations to acquire luxury auto brand Jaguar

Land Rover, has little time to get involved in day-to-day details of Tata's

many projects. However, with the Nano, "every cost, every component

price, has to be run by me," he says.

Coordinating the vendors with Tata Motors' team was a whole new exercise

in logistics. Wagh quickly realized it was necessary to bring everyone on

board, "else it leads to last-minute heartache and delays."

Every morning, he would spend an hour or two on the floor of the Pune

factory, insisting that everyone involved -- designers, manufacturing teams,

vendor development people -- be there to accelerate decision-making and

problem-solving. "We had to have the pulse of the project and know exactly

where the hurdles were," Wagh remembers.

Over time, Wagh's team grew to comprise some 500 engineers, an

impractically large group to gather on a daily basis. So instead, a core team

of five engineers gathered every day at 3 p.m. to discuss the latest

developments. Each engineer represented a different part of the car: engine

and transmission, body, vehicle integration, safety and regulation, and

industrial design.

Attention to detail pays off

Fitting the parts of the car together required lots of little, head-breaking

details, recalls Wagh. The engine, for instance, was designed three times.

Initially, Wagh thought they'd buy an off-the-shelf engine and so studied all



the small-capacity engines available. They were unsuitable, so in early 2005

he decided to build his own.

The first was a 540 CC engine that, when fitted on the prototype, lacked the

necessary power. So its capacity was increased by 9%, then by another 9%,

before Wagh finally settled on a 623 CC engine. Then the foot pedal had to

be realigned to create more legroom.

The body had to be changed because Ratan Tata, over six feet tall himself,

wanted it to be easy for tall people to get in and out of the car. "Imagine the

plight of the body designer -- he went through hundreds of iterations, then

at the last minute the car length was increased by 100 millimeters!" Wagh

says.

The attention to detail paid off: When the car rolled onto the dais at the

Auto Show in New Delhi in January, and Ratan Tata stepped out of the

driver's seat with ease, it made an immediate impact.

What shook the automobile world most was the fact that the designers seem

to have done the impossible: The sleek, sophisticated Nano doesn't look

flimsy or inexpensive. If it had been an upgraded scooter on four wheels,

Tata still would have been applauded for making a family of four safer on

Indian roads. The Nano, however, affords both safety and status.

"The innovation wasn't in technology," Kant recalls. "It was in a mindset

change." The Nano, he adds, has put an end to all discussions of having

variants of scooters or quadricycles as passenger vehicles on India's roads.



OBJECTIVES:

A. To understand the reasons behind failure of such a good product.

B. To scrutinize the problem in economic context.

C. To understand what should have been done to make it a sheer success.

METHODOLOGY

The researcher has done this project on the topic “The Failure story of Tata Nano”. He

has adopted doctrinal research based on the primary sources for the purpose of my study.

LIMITATIONS

A. The TIME limitation – As a student it was not possible to devote such time to

the search in which each and have geographical indicator would have been

taken into consideration.

B. The MONEY limitation – As a student it wasn’t possible to gather funds for an

extensive research.



Hence this research was limited only to 50 TATA NANO customers on the

basis of random- convenience based sampling.

CHAPTER 2

Review of Literature

What Influences CONSUMER BEHAVIOUR

The aim of marketing is to meet and satisfy target customers’ needs and wants. The field of consumer behaviour studies how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

The starting point for understanding consumer buying behaviour is both when marketing and environmental stimuli enter the buyer’s consciousness. In turn, the buyer’s characteristics and decision process lead to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the buyer’s purchase decisions.

Culture is the most fundamental determinant of a person’s wants and behaviour. A child growing up in the United States is exposed to these broad cultural values: achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness.

Social classes are relatively homogeneous and enduring divisions in society and their members share similar values, interests, and behaviour. Social classes reflect income as well as occupation, education, and other indicators. Also, within the culture, persons are



perceived as occupying inferior or superior positions according to social class. Social class is indicated by a cluster of variables rather than by any single variable. Still, individuals can move from one social class to another—up or down—during their lifetime. Because social classes often show distinct product and brand preferences, some marketers focus their efforts on one social class.

Reference groups consist of all of the groups that have a direct (face-to-face) or indirect influence on a person’s attitudes or behaviour. Groups that have a direct influence on a person are called membership groups. Secondary groups, such as professional and trade union groups, tend to be more formal and require less continuous interaction People are also influenced by groups to which they do not belong. Inspirational groups are those the person hopes to join; dissociative groups are those whose values or behaviour an individual rejects.

The family is the most important consumer-buying organization in society. The family of orientation consists of one’s parents and siblings. From parents, a person acquires an orientation toward religion, politics, and economics as well as a sense of personal ambition, self-worth, and love. Marketers are interested in the roles and relative influence of the husband, wife and children in the purchase of a large variety of products and services.

A person participates in many groups, such as family, clubs, or organizations. The person’s position in each group can be defined in terms of role and status. A role consists of the activities that a person is expected to perform. Each role carries a status. Supreme Court justice has more status than a sales manager, and a sales manager has more status than an administrative assistant. In general, people choose products that communicate their role and status in society.

The third factor is personal characteristics, including the buyer’s age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept.

People buy different goods and services over a lifetime. Consumption is shaped by the family life cycle. The traditional family life cycle covers stages in adult lives, starting with independence from parents and continuing into marriage, child-rearing, empty-nest years, retirement, and later life.

Marketers often choose a specific group from this traditional life-cycle as their target.

The aim of marketing is to meet and satisfy target customers’ needs and wants. The field of consumer behaviour studies how individuals, groups, and organizations select, buy, 14 | P a g eAll Review of literature articles have been studied from Online ISSN 2320-0073 VOL. 3, ISSUE 5 (May 2014).


use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Before developing their marketing plans, marketers need to use both rigorous scientific Procedures and more intuitive methods to study consumer behaviour, which is influenced By four factors: cultural (culture, subculture, and social class), social (reference groups, family, and social roles and statuses), personal (age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept), and psychological (motivation, perception, learning, beliefs, and attitudes). Research into all of these factors can provide clues as to how to reach and serve consumers more effectively.

To understand how consumers actually make their buying decisions, marketers must identify who makes and influences the buying decision. People can be initiators, influencers, deciders, buyers, or users, and different marketing campaigns might be targeted to each type of person. Marketers must also examine buyers’ levels of involvement and the number of brands available to determine whether consumers are engaging in complex buying behaviour, dissonance-reducing buying behaviour, habitual buying behaviour, or variety-seeking buying behaviour.

The five-stage consumer buying process consists of problem recognition, information search, and evaluation of alternatives, purchase decision, and post purchase behaviour.The marketer’s job is to understand the buyer’s behaviour at each stage and what influences are operating. The attitudes of others, unanticipated situational factors, and perceived risk may all affect the decision to buy, as will consumers’ levels of post purchase satisfaction, the company’s post purchase actions, and consumers’ post purchase use and disposal of the product. Satisfied customers will continue to purchase; dissatisfied customers will stop purchasing the product and are likely to spread the word among their friends. For this reason, smart companies work to ensure customer satisfaction in every stage of the buying process.

Conclusions of other researchers

Samson Itamer (1992) has observed that purchase decisions of cars are determined on the basis of both absolute attributes of the alternatives and their relative positions within the particular choice set under consideration. He has further suggested that consumers are



less likely to choose alternatives that are offered with unneeded features or premium even when the features do not reduce the value of the product in any way.

William B Dodds (1991) investigated the effects of the intrinsic cues of price brand and store information on consumer perception of car quality. They found that price had a positive effect on perceived quality but a negative effect on perceived value and respondent’s willingness to buy.

Anil Thakraney: Nano: Manufacturing success, marketing failure06 Jun, 2012 Observed that the moment they positioned it as the ‘poor man’s’ car, they took the sex out of the equation. Even at a low cost, a car’s association with status and pride must be maintained. No one wants to be perceived as a loser when it comes to his car, a person’s most visible possession. This simple little consumer insight eluded such highly paid and experienced marketing minds. The bad news is that the damage is done. Whatever tricks the Tata Nano marketing guys have up their sleeves, it will be very difficult to erase the ‘poor man’s car’ image. I would like to meet Mr. Tata and discuss this, but he seems to be allergic to desi journos.

Aradhana Krishna (1994) viewed that buyers purchase behavior can be influenced not only by the current price of a product but also by what price they expect in future as in case of automobiles i.e. cars.

Gerald D Bell (1967) studies how a new car buyer feels about his purchase and what factors determine his reactions when he begins living with his new car. The finding of this investigation suggests the effect of a customer’s self confidence his personality and the quality of service he receives upon his cognitive dissonance.

Edward L Grubb and Greg Hupp (1968) test a methodology for measurement of self concept and consumer behavior in comparable terms and therefore to further substantiate the relationship of self theory to consumer behavior. The author suggest that the owner of a specific make of car perceive themselves as having self concepts similar to those of others who own the make of an automobile.

Darlin Doman (1983) in the article has mentioned that satisfied new car buyers discuss their experiences with eight people dissatisfied buyers complain to an average of twenty two people.



C. W Park et al (1994) assessing the consumer knowledge has observed that consumer knowledge is an important construct in understanding consumer behavior such as information search and information processing. Increase in self assessed knowledge was associated with decrease in utilization of sales people’s recommendations in automobiles.

Andrew et al (1996) assess number of different measures of consumer expertise by examining their ability to predict correct choices in the stimulus based choice tasks.

Pavleen et al (2003) in their article have perceived that the family of a reference group has one of the strongest most immediate and most pervasive effects on a consumer’s personality motivation and attitude. The author has affirmed that from the marketing point of view investigating the family as a consumption unit becomes crucial since attitudes towards saving spending and even towards car brands are often mobilized by the family.

Richard et al (2003) in their large scale national study investigates the influence of monthly payment incentives on the decision making process of the cars.

Vivek Kaul Nov 18, 2014 11:14 IST

Bill Gates wrote a blog. He titled it The Best Business Book I've Ever Read. As he wrote "Not long after I first met Warren Buffett back in 1991, I asked him to recommend his u book about business. He didn't miss a beat: "It's Business Adventures, by John Brooks," he said. "I'll send you my copy." I was intrigued: I had never heard of Business Adventures or John Brooks."

The hype around the car was huge. When the car was launched in 2009, the entire world

media was in Delhi for the launch. In fact, before the car was launched the rating agency

Crisil said that the car could expand the Indian car market by 65%. People who had cars

were already worried about the traffic on the roads getting worse than it already was,

because of the Nano.

Before the car was launched in 2009, prices in the used car market fell by 25-30%, given

Nano's expected price point of Rs 1 lakh. Nonetheless, Nano could not live up to the

hype. In a May 2014 news report, the Business Standard pointed out that "Launched in

2009, Nano sales between 2010-11 and 2012-13 constituted 23-24 percent of Tata



Motors' total sales. But Nano sales declined dramatically after peaking to 74,527 in 2011-

12. The numbers came down by more than 70 percent in two years to 21,129 in 2013-14.

Tata Motors has set up a facility at Sanand in Gujarat to make 250,000 Nanos a year."

So, the car sold nowhere near the numbers it was expected to. What did not help was that

when the car actually started hitting the market in 2010, some units caught fire. After all

the hoopla around the Nano, this wasn't what the public was ready to accept.Brooks' sentence written for Edsel can be re-written for Nano as well: "After the Nano

was introduced, its pitfalls were the talk of the land." Further, the hype around the car

was so huge that the people were expecting something totally out of this world. They did

not know what they wanted, but they did not want what they got. The question that

remains is how much could you expect out of a car which was supposed to be sold at Rs

1 lakh?

Taking into consideration the views of all the other researchers, the researcher also

thinks that there was a problem with marketing and branding in the product. The product

undoubtedly was a brilliant make but the marketing team screwed it all.

An upper middle class family would not like to step in the foot of a class which explicitly

states itself as a poor man’s car and this image can’t even be blurred. Well TATA needs

good marketers I guess. But well done NANO MAKERS.



CHAPTER 3

Data Collection Methods:

For this research study, primary data was collected.

Primary Data has been collected through personal contact. For this purpose questionnaire was considered with the owners of TATA NANO in the month of April, 2015.

The Instrument for data collection, in the form of a ‘Structured Questionnaire’, was

designed to elicit information on demographic and psychographic aspects of the

respondents. The demographic aspects included age, gender, education, occupation and

income. The psychographic variables included attitude towards TATA NANO and the

features they love. The questionnaire had a mix of open-ended and closed-ended

questions in it. The open-ended questions, which gave an added ‘qualitative feel’ to the

instrument, provided the logic or rationale for the behavioural patterns and thus helped,

generate insights.

The sample of survey respondents comprised of teenagers and youths and old people in

the age groups 15-65 years across all Jaipur, Rajasthan. In all 50 respondents were chosen

on a random convenience-sampling basis.



About convenience-sampling: Convenience sampling is a type of non-probability

sampling technique. Non-probability sampling focuses on sampling techniques that are

based on the judgement of the researcher.

Convenience sampling is very easy to carry out with few rules governing how the sample

should be collected. The relative cost and time required to carry out a convenience

sample are small in comparison to probability sampling techniques. This enables you to

achieve the sample size you want in a relatively fast and inexpensive way.

CHAPTER 4

Data Analysis:

Quantitative methods using IBM SPSS statistics 20 were used to analyse the various types of data collected through questionnaire.

Data analysis is as follows:

Data Analysis

1. On Age group of TATA NANO customers

TITLE: Age

Frequency Percent Valid Percent Cumulative

Percent

Valid 18-30 20 40.0 40.0 40.0

31-40 10 20.0 20.0 60.0

41-50 11 22.0 22.0 82.0

50 and above 9 18.0 18.0 100.0



Total 50 100.0 100.0

It has been depicted in the Pie Chart that age group of 18-30 years is the largest customer of Tata Nano contributing 40% of the total customers.The age group of 31-40 contributes 20%, 41-50 contributes 22% and the age group of 50 and above contributes the lowest i.e. 18%.

2. On Income group of TATA NANO customers

TITLE: Income




Percent

Valid

0-200000 20 40.0 40.0 40.0

200000-400000 24 48.0 48.0 88.0

400000 and above 6 12.0 12.0 100.0

Total 50 100.0 100.0

It has been depicted in the Bar Diagram that income group of Rs. 200000-400000 is the largest customer of Tata Nano contributing 48% of the total customers.The income group of 0-200000 contributes 40%, and the income group of 400000 and above contributes the lowest i.e. 12%.

3. On Nano vs. Bike preference of TATA NANO customers



TITLE: NANOORBIKE


Percent

Valid

Yes 33 66.0 66.0 66.0

No 17 34.0 34.0 100.0

Total 50 100.0 100.0



It has been depicted in the Area Diagram that 66% of the customers preferred Nano instead of purchasing a bike. And on the other hand 34% of the customers preferred not to go for Nano taking bike as a substitute.

4. On which feature attracted TATA NANO customers to buy the same

TITLE: FEATUREATTRACTS


Percent

Valid

Price 21 42.0 42.0 42.0

Design 8 16.0 16.0 58.0

Mileage 11 22.0 22.0 80.0

All of the Above 10 20.0 20.0 100.0

Total 50 100.0 100.0



It has been depicted in the Histogram that PRICE attracts 21 out of 5o customers being the most attractive feature. DESIGN attracts 8, mileage attracts 11, 10 say all of the above and interior space attracts none out of 50 being the lowest out of 50.

5. On how many customers agree that TATA NANO is cheap, economical, affordable and compact car as compared to other cars in small car segment



TITLE: NANOQUALITIES


Percent

Valid

Highly Agree 9 18.0 18.0 18.0

Agree 19 38.0 38.0 56.0

Neutral 8 16.0 16.0 72.0

Disagree 10 20.0 20.0 92.0

Higly DisAgree 4 8.0 8.0 100.0

Total 50 100.0 100.0

It has been depicted in the pie chart that 38% customers agree with the fact that TATA NANO is cheap, economical, affordable and compact car as compared to other cars in small car segment.



However 20% disagree, 18% highly agree, 16% are neutral and 8% highly disagree upon the fact.

6. On how many customers agree that TATA NANO is people’s car

TITLE: People’s Car


Percent

Valid

yes 32 64.0 64.0 64.0

no 18 36.0 36.0 100.0

Total 50 100.0 100.0

It has been depicted in the line graph that 64% customers agree that NANO IS PEOPLE’S CAR.On the other hand 36% of the customers think that NANO IS NOT PEOPLE’S CAR.



CHI SQUARE1. On comparing gender group of the customers and usage as taxi of TATA

NANO

Gender * Taxi Cross tabulation

Count

Taxi Total

Embarrass Don't Care

GenderMale 14 12 26

Female 16 8 24

Total 30 20 50

Chi-Square Tests

Value df Asymp. Sig. (2-

sided)

Exact Sig. (2-

sided)

Exact Sig. (1-

sided)

Pearson Chi-Square .855a 1 .355

Continuity Correction .404 1 .525

Likelihood Ratio .859 1 .354

Fisher's Exact Test .399 .263

Linear-by-Linear Association .838 1 .360

N of Valid Cases 50

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 9.60.

b. Computed only for a 2x2 table

Hypothesis (H0): There is no relation between gender and usage as taxi.Hypothesis (H1): There is relation between gender and usage as taxi.Since the significance value of Chi Square is more than .05, we accept the hypothesis. That means that there is relation between gender and usage as taxi.Females tend to feel more embarrass when NANO is used as taxi as compared to males.



2. On comparing gender and will the customers recommend TATA NANO to their family and relatives

Gender * Recommend Family Cross tabulation

Count

Recommend Family Total

Yes no

GenderMale 9 17 26

Female 5 19 24

Total 14 36 50

Chi-Square Tests


sided)

Exact Sig. (2-

sided)

Exact Sig. (1-

sided)

Pearson Chi-Square 1.176a 1 .278

Continuity Correctionb .592 1 .442

Likelihood Ratio 1.190 1 .275


Linear-by-Linear Association 1.152 1 .283

N of Valid Cases 50



Hypothesis (H0): There is no relation between gender and recommendation of Nano.Hypothesis (H1): There is relation between gender and recommendation of Nano.Since the significance value of Chi Square is more than .05, we accept the hypothesis. That means that there is relation between gender and recommendation of Nano. Males tend to recommend TATA NANO more to their family and relatives as compared to females.



3. On comparing occupation and tendency to purchase after the price hike of TATA NANO

Occupation * Recommend Crosstabulation

Count

Recommend Total

yes no

OccupationStudent 13 3 16

Professional 20 14 34

Total 33 17 50

Chi-Square Tests


sided)

Exact Sig. (2-

sided)

Exact Sig. (1-

sided)

Pearson Chi-Square 2.439a 1 .118

Continuity Correctionb 1.542 1 .214

Likelihood Ratio 2.591 1 .107


Linear-by-Linear Association 2.390 1 .122

N of Valid Cases 50



Hypothesis (H0): There is no relation between occupation and tendency to purchase after hike in price of NANO.Hypothesis (H1): There is relation between age occupation and tendency to purchase after hike in price of NANO.

Since the significance value of Chi Square is more than .05, we accept the hypothesis. That means that there is relation between occupation and tendency to purchase after hike in price of NANO.It means that students will decrease their purchase of NANO if the price of Nano rises as compared to professionals.



CHAPTER 5

CONCLUSION

The Tata Nano's launch failed by nearly every measure. Sales fell far short of forecasts. The relocation of the factory was a debacle. One need not invent a colorful metaphor to describe the situation: occasionally, the car even burst into very real flames.



"The People's Car" also known as the world's cheapest car, cost a mere 100,000 rupees - about $2,000. Achieving this price point represents a feat of frugal engineering. Yet as others have noted: no one aspires to own the cheapest car in the world.

Sure, consumers love bargains. But vehicle choice makes a statement about the buyer, something well documented in JD Power's research on why people buy Toyota's Prius. It's not about gas mileage; it's about image. The image consumer segments from A to E want to project has nothing to do with being the cheapest in the world. As the editor of Auto Car India points out, Tata added insult to injury in that the top-end Nano model was priced at about 200,000 rupees (two lakh) while still being perceived as a one lakh value.

There was the problem of positioning. The car was obviously to be targeted to families that travelled on two-wheelers at great discomfort and risk. But instead of using marketing channels to reach their target audience, Tata used social media and other non-conventional methods of marketing, probably due to margin issues. The sales reflected this. Half of the Nanos purchased were second cars, clearly violating the positioning which sought to transition people from two wheelers to four wheelers. The lack of communication to the appropriate customer segment led to the downfall.



Tata missed the mark by a wide margin on many accounts. Yet despite these errors the Nano has accomplished some big tasks. There is now a race to build a better "world's cheapest car." Thousands of articles, blog posts, books, and commentaries have been written about why the Nano went wrong and how to avoid the same mistakes. Tata appears to have taken good notes. The company is coming back with what appears to be a better version. By persevering and maintaining a focus on the base of the pyramid, the company demonstrates the enviable capacity for leadership and foresight. Yet perhaps most importantly, the Nano presents other companies and development organizations some clear lessons from which to learn.

Despite the setbacks, this is clearly a journey that Tata has embraced. If the Nano doesn't have you convinced, check out the Swach filter or $700 home able to be assembled in a week both produced by Tata. The company, whose roots to the base of the pyramid are the strongest around, has planted its sword in the ground. That's an admirable stance that shows clear leadership from a company that is not afraid to show its commitment to what was once deemed impossible, unwise, and unprofitable.

Tata is blazing a path forward, learning from failures as it goes, and showing the rest of the world how to get things done in the process. Tata may not have gotten it right just yet but the company's efforts -especially for the Nano - are teaching those of us focused on increasing access in base of the pyramid markets volumes. The next time the topic comes up and your company, friends, or favorite blog laments the failure of the Nano project, give a little thanks to Ratan Tata himself for being a courageous leader and helping to start a conversation that will continue to move this field forward.

In the eyes of the researcher the product was far from Excellency and it was what gave

other competitors, nightmares. But just because of faulty marketing the sales went down.

It’s a lesson for them. But well they say “KEEP ON AND KEEPING ON!” Cheers!



CHAPTER 6



Bibliography

Philip Kotler: Marketing Management

CHAPTER 7

ANNEXURE35 | P a g eAll Review of literature articles have been studied from Online ISSN 2320-0073 VOL. 3, ISSUE 5 (May 2014).

http://businesstoday.intoday.in/

http://nextbillion.net/

http://mediapanther.co.in/


QUESTIONNAIRE ON TATA NANO – A RESEARCH ON ITS FAILURE

PERSONAL DETAILS- Please put a tick mark on the option you find most suitable.

A. AGE 1. 18-302. 31-403. 41-504. 50 and above

B. GENDER1. Male2 .Female

C. OCCUPATION 1. Student2. Professional

D. INCOME (in Rs)1. 0-200000 (in Rs)2. 200001-400000 (in Rs)3. 400001 and above (in Rs)

OTHER DETAILS- Please put a tick mark on the option you find most suitable.

A. Did you prefer to go for the NANO instead of a bike?1. Yes2. No

B. Do you agree that TATA NANO is cheap, economical, affordable and compact car as compared to other cars in small car segment?1. HIGHLY AGREE2. AGREE3. NEUTRAL4. DISAGREE5. HIGHLY DISAGREEC. Which feature of NANO attracts you the most that inspired you to go for NANO?1. Price2. Design3. Mileage4. Interior space5. All the above

D. Which colour of NANO did you prefer?1. Red2. Blue3. White4. Yellow



5. Silver

E. For what purpose do you mainly use NANO?1. Offer it to your children to use it in place of a two wheeler.2. Used as family car for shopping and travel.3. As a taxi.4. Offer as gift.

F. Do you think NANO is people's car?1. Yes2. No

G. Will you recommend NANO to your friends and relatives?1. Yes2. No

H. If the price of NANO rises, would you still RECOMMEND purchasing it?1. Yes2. No

I. Will Tata be able to maintain the price of Nano in future if there is hike in cost of raw materials?1. Yes2. No

J. How will you feel if NANO is used as a taxi?1. Embarrass2. Don’t care

K. Is there a traffic problem with the introduction of Nano on Indian roads?1. Yes2. No

L. Can you trust NANO for safety?1. Yes2. No

Dear Sir/Ma’am, Thank you so much for your valuable time. I am so very grateful to you.


Failure of tata nano

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