Thursday, January 10, 2008

Tata Nano : A Promise is a Promise

Brand : Nano
Company : Tata Motors
Agency : Rediffusion ( Rumour)

Brand Count : 303


As a die-hard fan of Ratan Tata , I could not resist joining the euphoria around the Tata Nano. Yes, the world has seen and heard enough of the Tata's one lakh car. Today , every news, talk show talks about this revolutionary new product. Tomorrow newspapers and mags around the world will be celebrating this brand.
Seldom one gets an opportunity to witness a product launch that has the potential to change the dynamics of an industry as such. When the world boasts of an Ipod , we Indians did not had something to talk about. Now we have.
I am a big fan of Ratan Tata because he is someone who could be considered a true representative of Indian management ethos. The way he took the leadership of a whithering empire and the controlled aggression through which he tookover Corus and the way he came out of his initial failures at Nelco all makes him look attainable and inspiring . The dignity with which he handled the situation when his foray into starting an airline was torpedoed by the Government and now the one lakh car exemplifies the qualities that a young mind should aspire for.

The launch of Nano is a valuable lesson for all aspiring entrepreneurs. The brand is a symbol of VISION. In 1998 , Ratan Tata announced his dream of giving a car for one lakh. Many critics scoffed at the mention of the dream . Auto majors around the world questioned the business logic of the dream. Months back, the chairman of Suzuki Motors categorically ruled out the possibility of such a car at such a price. Now the product is now in front of all of us to see. In a sense this product is also a reminder of the vast potential of a human mind. Just like Roger Bannister who broke the four minute barrier, Ratan Tata has broken the one lakh barrier. Ofcourse he had the money but remember he is the first one to do so in the world. The words he spoke on the launch " A promise is a promise " makes a perfect tagline for this car.

The launch had raised thousands of questions about the quality of the car and the performance. But the look of the car silenced many critics. Tata proved that cheap does not always mean bad quality. Nano looks better than most of the small cars that are there in the Indian market. C K Prahlad in his pathbreaking book " Fortune at the bottom of the pyramid " reminds us that Indian consumers at the bottom of pyramid looks for value even at the low prices. Brands which focused only on low prices and produced junk products always have failed in the Indian market.

The new brand Nano will do two major changes in the Indian markets :
a. It will open up a new segment in the Indian Four Wheeler Industry
b. It will inspire many Indian entrepreneurs to have grand vision.

I think Nano will redefine the pricing in the Indian small car market. Either companies like Hyundai , Maruthi may have to cut the prices of existing small cars or they have to comeout with a similar priced car.

Nano will be making cars an affordable luxury for many Indians. To a limited extend it will affect the two wheeler segment but only to a limited extent. The reason is in the running cost and maintenance of four wheelers. At the current oil prices, Cars are still expensive to run & maintain. It cannot in the near future replace the functionality of a two wheeler until cars match the fuel efficiency of two wheelers.

So Nano will be the first car of many Indians who dream of a four wheeler . For those who travel less than 300 km permonth, Nano is definitely an alternative for two wheelers but more kilometers than that will burn a hole in the pocket of an average Indian consumer . Indian consumers will make a careful balance of usage of his two wheeler and Nano to make sure that his budget does not go out of control.There will also be many who could not buy Nano because their flats or houses didnot have parking space ( just joking! ).

Nano also will inspire many to think big. While Ambani brothers make us watch their progress with awe rather than inspire, the success of Ratan Tata will inspire us because he strikes a chord. The fact that Nano was put in reality within four years will also mark a significant turning point in the way we look at our engineering and design talent. The 1700 crore investment that Tata made in this project will be an eyeopener to many who are reluctant to put their money in R&D.

In the marketing front, Nano had the dream start . Infact Nano may need no ads but heavy dose of positive PR during the launch. The brand may have to counter the skepticism surrounding the performance . Another nightmare is managing the initial rush of the customers. Since this is a car for the common man, there is every possibility that the customers could be given a raw treatment at the dealership touch- points. Indian marketers are still to wake up to the possibilities of a good customer service. How Tata and its dealers handle the initial euphoria will be something to watch for in the Customer-relationship perspective .

Whether the car performs or not, Nano is set to change the dynamics of an Industry. I am happy that my favorite business leader is making that change.

8 comments:

  1. I just put together some big challenges... that TATA Nano might just face on my blog - http://www.mokshjuneja.com

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  2. Anonymous12:59 AM

    TATA Nano is surely a great product to come out of the Indian Industry... Shows up the maturing of the whole Indian industry.. Hope how TATA is going to manage the demand & inventory (since demain is going to be much more than supply).. :)

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  3. sir,
    Ratan Tata was capable of keeing up his promise to a very large extend.Tata Nano is in fact a good news as far as common man is concerned.any person who can afford a two wheeler can now look in for Tata Nano.
    but there is serious issues which need to be considered like as u have mentioned in the blog about qutality and durability. That can be proved only by the test of time. but as far as India is concerned there is serious issues if the two wheeler industry is going to boom as such. one of the major factors
    - Indian roads are at present itself crowded like hell. situation of metros are worse than in other. so when there is a tremendous increase in the number of cars. The situation is worsened.
    - The fuel price in India is very high and is expected to raise. so the booming of the four wheeler industry will reduce the disposable income of the normal house holds. which will influence the economic growth of the county adversely.
    - Every person who has a desire for a vehicle will start looking at Nano. which will not only increase the initial investment and also the maintaince cost. leading to serious financial problems in the families. simply because they thaugh they could afford a car than a economy bike.
    - dealers will be getting less commission on sales. they will have to make it up in the number of sales. what ever it is the service facilities will not be up to the mark as the commission for the product is low. ultimately the customer will have to suffer.
    - Banks and other financial enterprises will gain a lot a they will provide loan for those who are not capable of buying Nano for ready cash. which will shift the car form one lakh to one and a half lakh.

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  4. I cant help but think a distinct similarity between Apple's Steve jobs & Tats's Ratan Tata...Guess what??

    Check my post on the similarity front!!
    @ http://tinyurl.com/26dw68

    Cheers to Indian Foray into World purview courtesy Mr. Dependable Tata

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  5. Great article, Harish! That man is just absolute.

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  6. Sir,
    The Nano is undoubtedly a revolution. But The real major revolution will come maybe 2 years down the line with the evolution of the second hand nano car market.

    The second hand nano market ( 2 or 3 years hence ) will change everything.

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  7. Yes, it will definitely change everything..in worse. If we had problems with too much cars even when these very cheap cars didn't existed, you can imagine when everyone will be able to afford one. It will be just like the 1 horse-power vehicles :(

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  8. Interesting to examine the different marketing practice that exists. Exciting times and opportunities for marketers

    ReplyDelete

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