India's largest automobile company is struggling with its passenger car business. The company which owns best selling ( once upon a time) brands like Indica, Indigo, Safari and the " Iconic" Nano is finding it difficult to sell their cars in a market which is diesel crazy. Isn't it ironic that Tata Motors is not at the top of a market where diesel models are selling like hot cakes ?
I was reading a very critical piece of analysis in Forbes India ( read here) which throws in many pertinent issues. My two cents is that there is a larger issues of marketing in play here. Tata Motors has a big marketing problem and the company is not doing anything on that. It is sad.
Tata Motors virtually changed the Indian passenger car market in 1998 with the launch of Tata Indica. Although Indica faced lot if teething issues , the brand became a trail-blazer creating the diesel car segment which is affordable and durable. But along with the success came the baggage of perception. Indica despite being highly successful was perceived to be a car riddled with nagging problems. The lack of refinement and the not-so-perfect build quality became the hallmark of Tata passenger cars. Consumers accepted those nagging issues because the value offering was so good.
But market began to change with competitors catching up with better quality diesel engines and superior built quality. Tata motors , in my opinion, was stuck in the past. Although the company came out with product refinement, it failed to make the quantum leap in changing the perception problem.
Now a time has come where Tata cars are not in the ' choice list ' of the customers. It is a grave problem that needs to be addressed quickly other wise the firm will enter into a league of Ambassadors and Premier Padminis.
Tata Motors need a new face. The company is desperately trying to improve upon the Indica platform which has a huge perception issue. If the firm wants to get back into the game, it needs a new brand which is distinct from Indica and Vista as a brand has not been effective since it was launched as a sub-brand of Indica. So a new product with a new brand would be the ( expensive) option available for Tata Motors to make a comeback. At the product level, nothing less that a sort of quality revolution is needed to bring consumers back to Tata showrooms. Aria was a leap in terms of built-quality but priced beyond common sense.
The product related drive should be followed by a strong branding campaign for Tata Motors to change the quality perception. This should be backed by a strong change in attitude of dealers towards Tata Motors ' customers. The dealers still live in the era where there is a beeline of customers for Indica. That attitude needs to be changed and a strong responsive action at the moments of truth touchpoint is needed in this crisis.
Tata Motors need a strong product pipe-line backed by a strategy to change the perception of the market towards its products. This needs to be addressed at the highest level and Tata Motors has the wonderful JLR resource to do this within no time.
More than the marketing crisis...its their Product design Crisis...i am sure you have seen ..the look and feel of the products used in Indica..and Neither the Design of the Any Tata cars look at par with international standards....or atleast trying to bring something according to the taste of the consumers...
ReplyDeleteTheir only playground is Cheap..sadly..
When TML introduced Indica, may the market wanted a better alternative for Ambassador in the diesel taxi segment with the then purchasing power of passengers who use taxis. Today with the increase in purchasing power, people are opting for more comfort rather than just price.So, many passengers will opt for a better vehicle than Indica.Yet another reason could be that the diesel prices have been increasing at a faster rate with the result that the difference between price of petrol and diesel is is decreasing. There is a general perception that petrol vehicles are smoother and costs of maintaining them are less than those of diesel ones.
ReplyDeleteAbout Nano, may be an innovation from the BOP angle, but did the market crave for such a product?I doubt.
Passenger cars seem to be facing a a bad strategic decisions from Tatas.Strategy is not only to decide to do certain things; it is also to decide not to do certain things.Porter had in fact opined that "The essence of strategy is choosing what not to do.".
TATA Motors have always been associated with VFM products. Be it Indica, Vista, Indigo. But the target segment who appreciates them are sadly, the taxi fleet operators. Domestic users (the typical private car user) values the looks, the branding and pride of ownership much more than fleet operators. And their SUV segment should have been the growth driver. There, they have failed miserably. TATA SUMO is known for its rugegdness, and less overall operating costs. SAFARI is a brand they have milked without investing anything, and it shows. SAFARI STORME doesnt entice owners. ARIA again, a pricing failure, and overall, a marketing communication failure. ARIA was positioned as a crossover. It was not.Their dealerships are not at all helping them. Dismal service from them is another issue.
ReplyDeleteNano has become a symbol of our changing means of transport and it also signifies a completion of dream of India's most favored and loved businessman Mr. Ratan Tata who dreamt for this car for his fellow countrymen.Now anyone can buy Nano online and he or she has to pay just booking amount and after completing transaction,car will be delivered at his home.
ReplyDeleteFact is that tata cars are much better now than earlier, and no less than other brands. But some critical strategic mistakes have let tata down, the biggest of which is sticking with old brand names of Indica and Indigo. Had they merely removed prefixes Indica and Indigo from vista and manza cars, people would have perceived them as new cars which they actually are (much better than Indica and Indigo), and it would have been a different storey. Second big mistake was making of nano car, which suddenly changed their image from good car makers to cheap car makers. But good to see that finally they seem to be on right track with upcoming Zest and Bolt.
ReplyDelete