Sunday, December 26, 2010

Brand Update : Nano is the Key to Happiness

Its almost two years since the launch of Tata Nano. A lot has happened over these years. The much hyped & much criticized small car has hit the road and is running through its worst nightmare- sluggish sales.

When Ratan Tata announced the launch of Nano, the media went gaga over the product and the realization of dream of a common man's car. Globally Nano became a big news because of its unbelievable price tag of Rs 1 lakh. More over Tata was able to give a great looking car at a very cheap price.

In my earlier posts, I predicted that Nano will create record interms of sales. I believed that consumers will lap up such a well designed economical car. Nano will create history... but my predictions failed miserably. In November, Tata Motors was able to sell only 500 of Nano cars.

The problem for the brand started when reports of the car getting fire began spreading. Just after the launch, a few Nano cars got fire and the pictures of Nano on flames splashed across the media. Consumers began to seriously worry about the safety of Nano.

To counter this negative publicity , Tata Motors began serious efforts to restore faith in the brand. The company initiated a recall program where the existing Nano cars were fitted with additional safety features. Along with that, Nano was further tested for safety by engineers from Tata Motors as well as from Jaguar.

These measures ,to a certain extent, contained the damage of Nano's brand image. Further to the safety issue, the brand also faced the issue where consumers at the lower-income strata was declined loan by banks and financial institutions for buying Nano. Although the auto loans were always a risky liability for the financial institutions and loan-denial is not anything new in this industry, this issue was again highlighted across the media as a specific issue pertaining to Nano.

So the brand is now facing an issue which is highly perceptual. And a negative perception for a brand in the introductory stage of PLC can be fatal.

To tide over the issue regarding the trust + safety, Tata Motors introduced a four year/60000km warranty for the Nano. The warranty is an assurance from the brand aimed to build trust in the brand.

Along with these measures, Nano also launched its first television commercial this month.

Watch the ad here : Tata Nano TVC

The new ad projects the positives of the car and positions the brand as " Key to Happiness". The brand has adopted the tagline " Khushiyon ke Chaabi ".

What the brand needs is to restore confidence of consumers in the brand. The picture of Nano in flames is still embedded in the consumer's mind. It should be erased if the brand wants to see the sales figures upward. For that it should get as many Tata Nano on the road as possible. The more cars on the road will instill confidence in the consumers to buy this brand. For that the brand should go to any extent.

It is not that I am not aware of the negatives of Nano. But Nano is a genuine marketing effort to satisfy a gap in the market. As a marketer, this is a brand I don't want to see failing in the market.

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  1. I love the TV ad... It looks like they are on the right track.

  2. I always used to give example to people that 'if you are selling a Nano, you don't need advertising'. How wrong that statement is now...

    The image of the brand is seriously dented and as you rightly said they need more and more cars on the roads for people to have faith. "If others are buying then I should buy too."

    When the worms came in Dairy Milk Cadbury resorted to Big B. Should Nano resort to a celeb? May be... but certainly a celeb is not the target buyer of this low end budget car. May be Ratan Tata should himself come in the ad... May be...

  3. Jinesh Damodaran10:59 AM

    With Tata Motors, it has always happened in the past. When they launch any new brand,it fails at the initial stages but eventually the sale picks up and we see them on the roads.

  4. As a safety measure maybe they should introduce another model under the NANO brand (it may even be priced slightly higher) catering to a different niche audience. If the existing NANO fails to take off, perhaps the new NANO will if the product is good and holds promise to the target customer.

  5. I do agree to the negatives being attributed to the low sales, the other factor which i think is important is that the Nano as a car doesnt bring the aspirational aspect of owning a car. Although it is a car, the feeling isnt of something to showoff to your neighbours. It doesnt show that you belong to the upper middle class category. This i think is a reason as well..

  6. Nice car, I like it small, suits me. It is just nice that we have the internet to share our thoughts. Not knowing that sometimes these just brings you great commission before you know it.

  7. @Aroop: Nano is a car for masses not for niche audience,so increasing price might not be a great option but Tata's can launch an improved version like Nano i for improved.
    @Milind:Nano is a car that belongs to a category of Value for Money segmant, not as a high end/show off car.


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