But the car sold poorly and was discontinued. Then came along Tesla with all the hype generated by its founder Elon Musk. Tesla has just crossed the cumulative sales milestone of , cars after this US tax concession will cease and GM is following behind.
But the service was then not much used for it to make a difference to its owners. Being something that few wanted, it passed through the hands of successive owners and Yahoo finally killed it in But Kozmo. Thus ideas that die are often reborn by being transformed.
The answer to these will help formulate a value proposition, differentiating the product from the competition, which will have to be clearly targeted. The targeting of the scooter owner was wrong as he was more keen on social mobility and less worried about climate change.
By making a big pre-launch global splash and low cost being tied to volume, Tata Motors launched Nano as a volume car with large production capacity. It could not and did not want to think small — begin small and learn, change and adjust as it went along. It will take time before the unbearable pollution in Indian cities will make people realise that it will be best not to own a car and rely on efficient public transport.
Or if you must have a car then a small car will be preferred. Then, perhaps, the day for an electric Nano will come. About Us. Support Us Login. Become A Supporter. Hindi Marathi Urdu. Terms Privacy About Us. All the newspapers were printing updates about the much-awaited Tata Nano. Everywhere you went, people were talking about the Nano. Very rarely does a product receive as much hype before its launch as the Tata Nano. Fast forward a decade, and the Nano has all but disappeared from the market.
All that remains are a few sparse sightings of this revolutionary car on the roads, and the specification details on the Tata Motors webpage. What made the Nano go from the car that would change the industry to the car that no one remembers? In order to understand the Tata Nano failure, we must go back to the beginning.
The idea behind the Tata Nano was deep-rooted in the principles on which the Tata Group functions. For them, business is not just a means to an end. The Tatas are very invested in the progress and development of the Indian economy.
Much of their efforts and business plans have social connotations attached to them. The Nano was no different. Ratan Tata had observed the plight of the lower middle class Indian for years. He had observed how normal people travel by public transport. Come wind, come rain, come scorching sun, the lower-middle-class Indian has to resort to local trains and buses to get to work.
For back then, a personal vehicle was considered to be an immense luxury. At best, all normal people could afford was a two-wheeler, nothing else. Having a car was a status symbol. The fancier the car, the more money it signalled to the crowds. The well-to-do used the number of cars they owned as a way of advertising their wealth and their comfortable position in the upper strata of society.
The common lower-middle-class man was left to the mercies of the Indian weather. Ratan Tata sought an answer to this problem. He wanted to create a society where a personal car would be treated as an essential item and not a luxury. He wanted to introduce the large masses of lower-middle-class Indians to the joys and the comfort of the four-wheelers.
He envisioned a world where people do not have to brave the weather and the woes of public transport in order to reach their workplace. The only thing that kept the masses from entering into the sphere of the four-wheeler was money. Of all the four-wheelers that were available in the market, the cheapest were in the range of Rs. The prices went straight up from there, depending on the features and the make. Ratan Tata realised that in order to make the four-wheeler accessible to a larger public, he would have to create a car which was priced as low as possible.
Thus, the idea for the cheapest car in India was born. The Nano was originally marketed with an expected price of Rs. This was previously unheard of for a four-wheeler and took the market by a storm.
Low price combined with a sturdy dependable design would ensure that owing a car was as easy as owning a motorbike or a cycle. The failure of a business plan is generally rooted in multiple reasons and a hundred small decisions along the way.
The failure of the Tata Nano was no different. Multiple mistakes along the way culminated in a disaster when the car was finally launched. There are three main reasons which contributed to the failure of the Nano. We have summarised them below. The first main reason for the Tata Nano failure is the wrong marketing strategy. Before launching a new product, it is very important to understand the target audience of that product. One needs to understand their psychology, their wants and desires.
The marketing strategy is based on making the product seem attractive to that audience. The product becomes successful if the company can generate a sense of longing towards that product so that people buy it as soon as it is launched. This is where Tata Nano failed.
The Tatas marketed the Nano as the cheapest car in India. The marketing campaign made it seem like the most attractive feature of the Nano was its unbelievable price of Rs. For a four-wheeler, this seemed too good to be true, for the normal price of the cheapest four-wheelers was double that amount. What the Tatas failed to account for was the fact that the Indian markets are different from the rest of the world.
One need not invent a colorful metaphor to describe the situation: occasionally, the car even burst into very real flames. 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. 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 , rupees two lakh while still being perceived as a one lakh value.
Tata missed the mark by a wide margin on many accounts. Yet despite these errors the Nano has accomplished some big tasks. Tata appears to have taken good notes. The company is coming back with what appears to be a better version this year. 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. The high-profile nature of the Nano launch helped accelerate change in the auto industry and beyond.
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