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Market analysis for tata motors

Paper Type: Free Essay Subject: Marketing
Wordcount: 2625 words Published: 15th May 2017

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The car is the most fuel efficient giving 26kilometer per litre on the highway and 22 kilometer in the city. It was first showcased on january10,2008 at the 9th annual auto expo in new delhi, india

The idea behind the manufacturing the cheapest car in the world came when ratan tata saw a family of four (husband, wife and two children) goin on two wheeler on heavy rain in highly risky condition

Tata motor was established in 1945 with its manufacturing base in India spread across Jamshedpur(Jharkhand), Pune (Maharashtra) Lucknow (Uttar Pradesh

Tata Motors Limited is India’s largest automobile company established in 1945, with consolidated revenues of Rs. 92,519 crores (USD 20 billion) in 2009-10. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer.

The company has its manufacturing base in India spread across Jamshedpur(Jharkhand), Pune (Maharashtra) Lucknow (Uttar Pradesh).

The company’s 24,000 employees are guided by the vision to be “finest in the manner in which we function, best in the products we , and best in our value system and ethics

India’s car market is a huge draw because car penetration is just

seven per 1,000 people, compared to 550 per 1,000 in such countries as

Germany or 476 in France, according to the Society of Indian Automobiles


Tata nano is a distinctive small car which is not only famous in india but around the world

Tata nano has some rare features which makes its most distinctive car in this hard times.

theusp of tatanano lies in its price and mileage.

Product Features

•Length:- 3.1 mtr

•Wide:- 1.5 mtr

•Height:- 1.6 mtr

•Weight:- 600 Kg

•Mileage:- 20 Kmpl

•Fuel tank:- 15 Ltr

•Engine:- 624 cc

•Top speed:- 95-100


•Ground clearance:-


Price is the value that customers give up or exchange to obtain a desired product. Payment may be in the form of money , goods, services, favours, votes or anything else that has value to the other party..

Tata nano is available in three variants

Tata nanostd = 115361

Tata nano cx = 140361

Tata nano lx = 177531

These are the ex showroom price

The reasons behind its low price in its segment are :-

The company is using plastics and adhesive rather than wielding.

The company is getting relaxation from the government in the form of subsidies and tax breakes.

The company is using inexpensive polymers or biodegradable plastics instead of full body

The low end model has no ac , no power steering, no power windows, no power bells and whistels.

The main reason behind such low price is safer mode of transportation for familes who commute by scooter and motor cycle

Tata motors kept its promise and delivered nano almost at its target price. Many top automobile companies are now rushing to make their own sorts to hit this untouch sector


Tata motor used this element of marketing mix ” promotion ” the most

Tata motors promoted “nano” mostly in print media like newspaper and magazine. When nano was launched in india they advertised on the first page of all newspaper so that they can grabpeople attention towards their product. They also promoted on hoarding and most accessible sitesin whole country sch as railway station, bus atands, malls, airport.

When people made online booking they were given merchandise such as phones, t-shirts, watches.

Other than print media nano got publicity through word of mouth as “one lakh car”. It was displayed in auto expo 2008 in new delhi , india and Geneva.

For different type of advertising activities like (television and other mass media)cost factor which was one lakh was kept in mind.

The company took the full advantage of the internet sector they promoted nano through cocial websites such as facebook and orkut by forming communities and groups .

They conducted online contest in whichthey arouse people to participate in it and were given a chance to to win tatanano.

Tata nanao sponsored many reality serials in india.

Cricket is a famous sports in india and they promoted the nano by sponsoring the cricket series with new Zealand. Each man of the match was given a tat nano as a gift.


1)Place :

, Tata Nano is making easy availability in select cities of Bihar, Chattisgarh, Andhra Pradesh, Jharkhand and Gujarat. Hence, the bookings for Nano may gradually go off as the open-sale of this world’s cheapest car has already commenced in West Bengal, UP, Mahrastra and Karntata. The dealers will hereinafter deliver Tata Nano depending upon the availability, said a statement from the company.

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So far the Nano has been delivered on basis of bookings made directly to the company. But the company has now got the production capacity increased due to the operations from its two facilities- Pantnagar in HP and Sanand in Gujarat. The Sanand plant came off after the company had to succumb to the local resistance in Singur, West Bengal, for erecting its facility. The commencement of production from Ssanand from this June has eased the delivery for the bookings made since 2009.

Further the open sale of Tata Nano was initiated in Kerala coinciding the much hyped Onam festival. In a bid to make more business with its Nano, Tata Motors has formed a financial tie -up with more than 26 nationalized banks


for helping the customers avail loan for the purchase of Nano. Another major push towards selling this Nano is the free trail drive from the local dealerships and exclusive Nano access points. So far Tata has selected 1.6 lakh customers out of which 1 lakh customers will be delivered Nano by this year end. Once the Sanand facility is upgraded to 20000 monthly units by this December, the remaining bookings will be cleared. However, Nano is yet to convince more customers free from the complacency regarding the fire incidents.

Gujarat government did good by processing the required documents for allotment of land in Sanand for Tata Nano plant.

However, this could not turn out to be so simple for Tata Motors.

A section of farmers in the region have already started protesting against the deal. They are raising issues related to land rights and compensation.

Some farmers are claiming that the land given to Tata belongs to their forefathers and they have been trying to get the rights to it from the government since several years now.

Media reports quoted a farmer as saying: “We are the real owners of the land and we have got nothing in the deal. We should get our share of compensation too. We’ll fight till the last for our rights.”


Segmentation is the process of dividing a large market into smaller pieces basedon one or more meaningful,sharedcharecterstics.segmentation is a way of life for marketers().

Segmentation is further divided into

Demographics,psychographics, behaviour.

Demographic:The tata nano is more known as a family car who cannot afford a high budget four wheeler. The car is also suitable for people of various occupation like professionals and technicals, managers, students and operative people who prefer the vehicle

Psychographic: Nano is most;y a car of the lower middle car people who want a family car but cant afford the high budget cars like swift,maruti,wagan R


Loyalty status:Some people are so loyal towards the brand name TATA that they prefer the car,Like when TATA came up with the concept of the whole idea of a cheapest car of the world

,people were actually enthusiastic towards the launch and to get further details

The car is highly economical with great mileage and easily accessible service centres in the various parts and services to meet the customer satisfaction

Initial when the product was launched people were enthusiastic and critical as well.With the launch people accepted not only in India but the product was highly acclaimed throughout the world


The introduction of Tata nano in the market for $2500 is a wonder in itself and a dream come true for the common people. The strategy of the company is to target the middle section of the pyramid which comprises of huge number of people with a low per capita income. it is targeting the still untapped market. The aim behind the innovation is to provide two more wheels to the two wheelers.

The global recession of the late 2000’s had an adverse effect on the automobile industry and the launch of tata nano during this period arose some questions over its success. But it proved to be a perfect product during the harsh times as it targets the decreasing purchasing power of the market.

The increasing threat of the global warming has forced the government across different countries to formulate certain rules and regulation to reduce the emission of Carbon di oxide example the new EU regulations and the EPA regulations. These promote the usage of high fuel efficieny cars and tata nano tops the chart in this perspective.


Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.Formulating competitive positioning for a product and a detailed marketing mix

The major competitors of Tata Nano in the market right now is only maruti Suzuki 800 and Hyundai santro.The other companies are also investing in the market like bajaj and hyundia to create cars at a low budget. Now they


The microenvironment consist of the forces close to the company that affect its ability to serve its customers- the company, suppliers, marketing, channel firms, customer markets, competitors and publ

In beginning tata motors faced a major land acquisition problem while setting up its mother plant for tata nano in singur , west Bengal.

Tata Motors faced bulk of challenges due to the political environment prevailing in West Bengal where they were initially planning to have their production plant. Although they had also purchased a land of 1000 acre but due to its fertility farmers launched a protest against the TATA motors. Due to that protest and governmental pressure TATA had decided to shift its plant from west Bengal to Gujrat and where they enjoy additional benefits and amenities from government in the form of land, tax benefits and other concessions.

The closest challenger of newly introduced “Nano Car” is Maruti 800 which is twice of its cost .maruti 800 is a two cylinders,33 horse power,623 cc engine. It is the most fuel efficient car and is available in market for the last two decades.

In an attempt to target tata nano’s monopoly in india as the cheapest car bajaj motors has tied up with French auto giant Renault to roll out a car with a price band of Rs.1.1o lakh

Many companies such as hero Honda, Mahindra and Mahindra are investing a large amount to bring its small cars in india


Following is the pest analysis for tata nano

Political factor

The political environment refers to te the local state national and global laws and regulation that affects the business.

Political Factors

The Automobile industry in India underwent positive changes after the formulation of new regulations in 1991. The new formulation included relaxation of the equity regulation, improved bank policies, free import and the foreign exchange, which boosted the automobile industry in India. From 1996 Ford, GM entered into the Indian market producing cars with world class standards and quality.

Tata Nano faced tough initial times. The plant was supposed to be located in Singhoor, West Bengal in India, but it faced with local problems and certain objections from the government, specifically the opposition party, regarding the concern for the farmers and their families. The conflict spread for approximately three years delaying the manufacture of the car and penalising the company with heavy losses. The shifting of the project made the company to bear a loss of approximately $350 million.

The company shifted the project from West Bengal to Gujarat where they received tax relaxations, land at subsidised rates and support of local people.

Economical factors

India has a huge mass transportation system.

India as a growing economy has vast transportation system which help the public to the large scale

➢Increasing road development

The government is investing a huge amount on development of road system to improve the transportation system in the country. Better and wider roads and the use of high quality of material to build the roads makes it enduring and long lasting

➢Higher GDP growth

With better shipping system the material can be move from one place to another in short span of time which consequently results in increasing GDP as more product can be manufacture quickly


➢Increasing Per Capita income

The per capita income of India is increasing at a rate of 10.3 % due to which there is increase in the purchasing power of the consumers.

➢Cheaper (decline interest rates) and easier finance scheme

The banking system in India is at its best. Banks are providing loans easily to people to buy cars at low rate of interest which encourages people to buy a new car. This boosts the sales in automobile industry which helps in the growth of country’s economy.

Social factor

The Automotive Research Association of India (ARAI) encourages the use of cars with reduced CO2 emission and increased fuel-efficiency. Tata Nano lives up to the expectations as it has a good fuel efficiency of about 26 Kmpl.

Tata Nano targets the lower huge segment of the pyramid which is comprised of people who have lower per capita income. India has a huge population falling into the same category. Thus Tata Nano suffices the needs of the common man in India.

Tata Nano subjects its image as the “First Car” for those who aims to shift from the two wheelers to four wheeler.

The success of Tata Nano might vary from country to country eg. In Italy the market demands a more trendy and powerful car. The average per capita income in Italy is higher as compared to that in India, thus, a higher segment of the market can be aimed.


Tata Nano aims to be in between the A and the B segment cars, since it is bigger than the ‘Kei’ cars in Japan and is smaller than the European ‘Super-mini’.

The car has higher fuel efficiency subject to the omission of certain bottom line features such as Air bags, Air Conditioner, Power steering etc. The absence of such features also represents a threat to its success in foreign markets.

Tata Nano is not available in different body configurations and variants and thus this car does not offer much flexibility in its design.


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