MK-101Sec-F Group-4

Executive SummaryHighly anticipated and hyped automobile debut in

India“The people’s car” or the “ 1 Lakh car” promising

safety and comfort Planned to be launched in gasoline-powered version

followed up by diesel versionsHighly fuel efficient – 22 to 26 kmplBacked up by the big brand image of Tata Motors, the

first Indian manufacturing company to be listed on the NYSE

Plans to target masses focusing on the lower income segment

Marketing Plan• Market Identification

• Providing Value

• Communicating Value

Market Identification Customer Segmentation/ Market Selection Income distribution

Middle-Income group (2-5 l.p.a.) Low-Income group (upto 2 l.p.a.)

Family-Size distribution Small family (2-4 people)

Potential substitutes Used cars 2-wheelers

Recommendation:More markets can be tapped

E.g., Youth, Old and retired people, Individual members of the family

Market Identification Customer Segmentation/ Market SelectionYouth Market Research Results

who buy

who doesn’t

Market Identification Value Positioning

Touted as the “one-lakh car” and “people’s car”The most fuel-efficient car

Market Identification Market attractiveness

Porter’s 5 forces

Marketing Plan• Market Identification

• Providing Value

• Communicating Value

Providing Value

Providing ValueProduct DesignDesign built from scratch – No compromise on

components’ qualityStreamlined modular design – components serving

multiple purposesNo frills - AC, tachometer, airbags, etc. not provided in the

base modelMore Boot/seating space compared to other ‘small’

carsGreen car – complying with stricter emission norms

Recommendations: Offer more customization

Providing ValuePricing – How Nano reached the 1 Lakh figure?Design built from scratch – No legacy costsCut down on featuresMulti function parts usedReverse auctioning used90% components outsourced; 75% of them single sourced.Low-rejection rate of parts– Warranty costs went down

tenfoldLow dealer margins (2-3%) and low contribution margins (15%)Taxes – 12.5%

Final on road price = Rs 1,30,000 – cheapest car in the world

Providing ValueSupply ChainSuppliers and Vendors

Long-term volume contracts Majority of components outsourced/single-sourcedCo-location of vendors

Manufacturing/Assembly/Processing facilityInitially 1 plant to be followed by addition of 3 other

Providing ValueSupply Chain…Distribution Network

Different distribution channels – car shipped as kitsEstablished distribution network – 200 existing Tata

Motors dealersRecommendation:Increase number of dealers

Service OutletsCurrently, the customer service index of TATA Motors is

below market average.Recommendation:Increase in number of service outlets

Marketing Plan• Market Identification

• Providing Value

• Communicating Value

Communicating ValuePromotionRadio FMPublicity event in MallsMore focus on safety – risks involved with two

wheelersProjecting image of Green TechnologyEncouraging use in rural areas