Failure and Revival plan of Tata Nano Name of Degree PGDM (2013-2015)

Date of Submission:-24/3/2015

Author:-Rajeev kumar Roll No :-20130135 TABLES OF CONTENTS

Page No Chapters 1 1. Executive Summary.4 2. History.......5 3. Company profile.13 4. Vision..27 5. Mission27 6. Values..27 7. New product development.27 8. Competitors32 9. Cost Reduction34 10. AdvantagesofCostReduction..35 11. Scope of cost Reduction35 Chapters 2 12. Market..36 13. Graphs .42 14. Market Share45 15. Advertising..45 16. Channel distribution 48 17. Positioning49 18. Tata Nano positioning Strategy51 19. Objectives and issue.57 20. Awards Tata Nano Received57 21. SWOT Analysis59 Chapters 4 22. Innovation of Tata Nano61 23. Tata Nano Revival.66 24. Tata Nano Failure..66 25. Conclusion.69 26. Acknowledgement.70 27. Reference...71

EXECUTIVE SUMMARY

Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1-lakh i.e. approximately USD 2000. It is manufactured by Tata Motor Limited, the largest automobile company in India. It is Chairman, Mr. Ratan Tata envisions that Tata Nano to become a three Peoples car which is affordable by almost everybody. Tata Nano was first launched in India on 1stApril 2009 and expected to be in Indian market by July2009. Since launching, it has created a huge buzz all over India. Within the first twodays of lunching, ithas received 5500 booking. The figures keep increasing every day sincethe launching. The car was the result of a five year research and development project carriedout by Tata Nano development team. While developing the car, Tata Motors and its SUPPLY CHAIN MEMBER constantly made efforts to reduce the costs while ensuring quality of each and every component including engine, steering, wheels, tires, windshield washing system, gear shifter etc.

INRODUCTION5. Tata Nano -History and Origin

The project to create a 1 lakh rupees (3000SGD) car began in 2003, under the Chairman of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the number of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and was based on the company's success in producing the low cost 4 wheeled Ace truck in May 2005.

To discuss the innovation strategy for Tata Nano, we first discuss the constraints as per which the company had to operate. In pursuit of excellence and to keep up to the initial promise made to people that Tata will come out with a compact, quality car within a price tag of Rs.1 lakh(3000 SGD), Tata Motors came up with a design, marketing and operational strategy keeping in my mind the constraints of:

Price Market Scalability Customer aspiration Resource efficiency

The proposition that prompted Tata to think about a peoples car was a social concern. On a wet August night in 2003 Mumbai. When Tata was driving back home from his office Bombay House in Flora Fountain, he saw a young couple travelling with their two children on a two-wheeler and was struck by the enormous risks of riding on a wet road. The thought of a small car germinated in his mind and a week later, on a visit to the Tata Motors plant in Pune, he shared his thoughts with MD Ravi Kant. Instinctively, his first query was whether the two-wheeled scooter could be made safe. The first doodles, in Tatas words, were sketches of a two-wheeler with a bar around it and some weather-proofing. Thereafter, a core team of 500 (including those in charge of setting up the plant) worked on the concept for four years. Indeed the first thoughts centered on a door-less four-seater that was more a quad recycle than a car. 5.1Objectives of the Tata NanoThe focused on the following objectives: To understand the concept of positioning and repositioning. To comprehend the positioning strategy adopted by Tata Nano in India. To determine the reasons for failure of positioning strategy adopted by Tata Nano in India. To understand the rationale behind the repositioning of Tata Nano.

5.2AbstractThe forces of globalization and technological advancement have rendered the market place highly competitive and complex. The customer's needs, wants and expectations are changing at an exponential rate posing great challenges to the companies. For surviving and thriving in this scenario companies need to develop effective brand positioning strategies .Positioning helps customers know the real differences among competing products so that they can choose the one that is most valuable and useful to term.This is a case study of Tata Nano, one of the most ambitious projects of Tata Motors, which was started in 2008. It was envisioned by the Tata Group former chairman Ratan Tata himself. The case focuses on how the initial strategies for launching and positioning Tata Nano as a Peoples Car backfired and how management recognized its shortcomings and mistakes that led to the wrong positioning of Tata Nano as Worlds Cheapest Car among the segment it was created for. And how finally after four years of it commercial launch, understanding the inevitability of positioning management repositioned Tata Nano as a "Smart City Car" by focusing on the youth to rejuvenate its image. Seldom do we see cars that rewrite the history books even before they are seen running around on the roads. And hardly ever do we see cars that vow to put the nation on four wheels. The Tata Nano is one such car that has been in the news for quite a few years, for reasons good and evil. Nano is a car which has breathed into life due to one man. Give credit to Mr. Ratan Tata for his determination to build a low cost family car that has come true, finally. Took long it did, but the Nano came in a beautiful form. Touted as worlds cheapest car by a far cry, Nano has been the talk of the town around the globe. Head honchos of big organizations have been pouring in by numbers to have a look at this engineering master piece. Nano as a part of a "new breed of 21st-century cars" that embodies "a contrarian philosophy of smaller, lighter, cheaper" and portends a new era in inexpensive personal transportation and potentially, "global gridlock". The Wall Street Journal confirms a global trend toward small cars, led by the Nano. The prefix "Nano" derives from the Greek root 'Nanos', meaning dwarf as with nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata family, founders of the Tata Group5.3How could Tata Motors make a car so inexpensively?

No Radio, Power windows, air conditioning, anti lock brakes, air bags, remote locks or power steering.

Rear wheel drive: manually actuated 4-speed trans axle that gives the car better fuel efficiency

Wheel Bearing: Wheel bearing is strong enough to drive the car at 72kmph but would quickly wear out at higher speeds.

Analogue speedometer, odometer and fuel gauge.

Single windscreen wiper.

Fundamentally, the engineers worked to do more with less. The car is smaller in overall dimensions than the Maruti, but it offers about 20 per cent more seating capacity as a result of design choices such as putting the wheels at the extreme edges of the car.

CarMakerIntroductionHPPrice(USD)

Model TFord19082019700

BeetleVW19562411333

MiniCooper19613411777

NanoTata2008332500

Modular Design Revolution:

One of the most significant dimensions of innovation is its modular design. The Nano is constructed of components that can be built and shipped separately to be assembled in a variety of locations. In effect, the Nano is being sold in kits that are distributed, assembled, and serviced by local entrepreneurs. The company could produce the mass items and ship it to them as kits.

Open Distribution Innovation:

Tata have called this 'open distribution' innovation because it mobilizes large numbers of third parties to reach remote rural consumers, tailor the products and services to more effectively serve their needs, and add value to the core product or service Nano-Lowest ever1. Increased modularity (both in products and processes)

2. Aggressive leveraging of existing third-party, often non-commercial, institutions in rural areas to more effectively reach target customers

3. Creative use of information technology, carefully integrated with social institutions, to encourage use and deliver even greater value .Modular designs combined with creative leverage of local third-party institutions help participants to get better faster

2

The design envisaged the use of plastic weather-proofing of the kind seen in rickshaws and contemplated using new materials. But somewhere down the line, the ideas ran into a conflict with Tatas brief. It was simple: it would seat four, have a low operating cost and meet all safety and emission standards. The team dumped the nascent design and focused on the process of building what would be a car differently. Nevertheless, Nano was finally unveiled in the 9th Annual Auto Expo on 10th January 2008 at Pragati Maidan in New Delhi, India; its successful development was welcomed with rapturous applause. When it could not be manufactured in the originally envisaged green-field plant at Singur there was disappointment all round that one of the best indigenous industrial marvels of India was being hindered. Nanos manufacturing journey from Singur in West Bengal to Sanand in Gujarat and appreciated Ratan Tatas commitment and gumption to commercialize. Nano despite the multitude of challenges and finally Nano were commercially launched on 23rd March 2009.The word Nano connotes high technology and small size. The Tata Nano's design is such that it offers an incredibly spacious passenger compartment which can comfortably seat four adults. With a length of just 3.1 metres, width of 1.5 metres and height of 1.6 metres, the Tata Nano has the smallest exterior footprint for a car in India but is 21% more spacious than the smallest car available today. A high seating position makes ingress and egress easy. Its small size coupled with a turning radius of just 4 metres, makes it extremely maneuverable in the smallest of parking slots. The engine enables the car to have a top speed of 105 kmph and negotiate inclines with a gradeability of 30%. Its fuel efficiency of 23.6 km/liters, certified by the Automotive Research Association of India (ARAI) under mandated test conditions, is the highest for any petrol car in India. The high fuel efficiency, coupled with a low kerb weight of 600 kg, ensures that the Tata Nano - at 101 gm / km - has the lowest CO2 emission amongst cars in India. Tata Motors has reportedly filed 34 patents related to the innovations in the design of Nano. The three trim levels available at launch were Tata Nano Standard, Tata Nano CX and Tata Nano LX. Based on the Society of Indian Automobile Manufacturers (SIAM) Automobiles classification, Tata Nano is classified in A1 segment, i.e. a mini car. The Tata Group is one of Indias largest and most respected business conglomerates withrevenues in 2005-06 of $21.9 billion (Rs967,229 million) the equivalent of about 2.8 percent of the country's GDP and a market capitalization of $46.9 billion. Tata companies together employ some 202,712people.

The Group's 28 publicly listed enterprises among them stand out names such as Tata Steel, Tata Consultancy Services, Tata Motors and Tata Tea have a combined market capitalization that is the highest among Indian business houses in the private sector and a shareholder base of over2 million.

The Tata Group has operations in more than 54 countries across six continents, and its companies export products and services to 120nations. The Tata family of companies shares a set of five core values integrity understanding, excellence, unity, and responsibility.

These values, which havebeen part of the Group's beliefs and convictions from its earliest days, continue to guide and drive the business decisions of Tata companies. The Group and its enterprises have been steadfast and distinctive in their adherence to business ethics and their commitment to corporate social responsibility.

This is a legacy that has earned the Group the trust of many millions of stakeholders in a measure few business houses anywhere in the world can match. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable.

There are 27 publicly listed Tata enterprises and they have a combined market capitalization of some $60 billion, and a shareholder base of3.5 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications.

Tata Steel became the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among the top five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land Rover. TCS is a leading global software company, with delivery centresin the US, UK, Hungary, Brazil, Uruguayand China, besides India.

Tata Teais the second largest branded tea company in the world, through its UK-based subsidiary Tetley. Tata Chemicals is the worlds second largest manufacturer of soda as hand Tata Communications is one of the worlds largest wholesale voice carriers. In tandem with the increasing international foot print of Tata companies, the Tata brand is also gaining international recognition. Brand Finance a UK-based consultancy firm, recently valued the Tata brand at $9.92 billion and ranked it 51st among the world's Top 100 brands.

5.4Business week Magazine ranked Tata 13th among the '25 Most Innovative Companies' list and the Reputation Institute, USA, recently rated it 11th onits list of world's most reputable companies. Founded by Jamsetji Tata in 1868, Tata is early years were inspired by the spirit of nationalism. It pioneered several industries of national importance in India: steel, power, hospitality and airlines. In more recent times, its pioneering spirit has been showcased by companies suchas TCS, Indiasfirst software company, and Tata Motors, which made Indias first indigenously developed car, the Indica, in 1998 and recently unveiled the worlds lowest-cost car, the Tata Nano. Tata companies have always believed in returning wealth to the society they serve. Two-thirds of the equity of Tata Sons, the Tata promoter company, is held by philanthropic trusts that have created national institutions for science and technology, medical research, social studies and the performing arts

13. COMPANY PROFILE

Tata Motors Limited is India's largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. 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's 24,000 employees are guided by the vision to be "best in the manner in which we operate best in the products we deliver and best in our value system and ethics."Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Luck now (Uttar Pradesh), Pant agar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat power trains. The company is establishing a new plant at Sanand (Gujarat). The company's dealership, sales, services and spare parts network comprises over 3500 touch points. Tata Motors also distributes and markets Fiat branded cars in India. Tata Motors, the first company from India's engineering sector to be listed in the New York. York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marco polo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select. International markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008. Tata Motors is also expanding its international footprint, established through export since 1961. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South America. It has franchisee/joint venture assembly operations in KThe foundation of the company's growth over the last 50 years is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. With over 3,000 engineers and scientists, the company's Engineering Research Centre, established in 1966, has enabled pioneering technologies and products. The company today has R&D centers in Pune, Jamshedpur, Luck now, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica. India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck.

Enya, Bangladesh, Ukraine, Russia, Senegal and South Africa. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009.

A development, which signifies a first for the global automobile industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at USD 2500 (excluding VAT and transportation cost).

Tata Motors Limited is India's largest automobile company, with consolidated revenues of USD 14 billion in 2008-09. 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's 24,000 employees are guided by the vision to be "best in the manner in which we operate best in the products we deliver and best in our value system and ethics."

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Luck now (Uttar Pradesh), Pant agar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat power trains. The company is establishing a new plant at Sanand (Gujarat). The company's dealership, sales, services and spare parts network comprises over 3500 touch points. Tata Motors also distributes and markets Fiat branded cars in India.

Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. International markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the Xenon pickup truck, with the Xenon having been launched in Thailand in 2008.

Tata Motors is also expanding its international footprint, established through exports since 1961. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South America. It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia, Senegal and South Africa.

Designed with a family in mind, it has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Its mono-volume design will set a new benchmark among small cars. Its safety performance exceeds regulatory requirements in India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being. Manufactured in India today. The lean design strategy has helped minimize weight, which helps maximize performance per unit of energy consumed and delivers high fuel efficiency.

The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint.

In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry, in keeping with its pioneering tradition, by unveiling its new range of world standard trucks called Prima. In their power, speed, carrying capacity, operating economy and trims, they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost. Tata Motors is equally focused on environment-friendly technologies in emissions and alternative fuels. . It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies in manufacturing processes, significantly enhancing resource conservation. Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. Tata Motors is committed to improving the quality of life of communities by working on four thrust areas employability, education, health and environment. The activities touch the lives of more than a million citizens. The company's support on education and employability is focused on youth and women. They range from schools to technical education institutes to actual facilitation of income generation. In health, our intervention is in both preventive and curative health care. The goal of environment protection is achieved through tree plantation, conserving water and creating new water bodies and, last but not the least, by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care. NANO which is a brain child of Ratan Tata raised hope for a lot of Middle class families by giving them the status of owning a car. Expectations were increasing amongst the customers regarding the product features and its efficiency. Competitors were eagerly waiting for its arrival to find whats inside NANO? The only factor the customer knew in advance was its price tag of 1 lac as conveyed by Ratan Tata. But why it was not a big hit and why is it still lagging to grab the market in spite of its good and convincing features.

13.1 Tata Nano One Lakhcar Project three Peoples Car

A promise is a promise said Rattan Tata Chairman Tata Motors on 10thJanuary, 2008, when the Nano was first displayed at the Auto Show in Delhi.

The Nano project didnt grab the attention of only Indians the entire world had their eyes glued to the worlds cheapest car. A truly Peoples Car, this time is from India.

Though the dealer price is Rs.1 lakh, the price on road, when it will be launched will reach around Rs.1, 25, 00 but it will be still more affordable and will be more ecofriendly than most other cars giving a mileage of around 23km/liters.

The price of the car is such that a lot of rich and HNIs, ifinterested, can buy the car just by a single swipe of their credit cards.

Providing a car worth rupees one lakh car was the dream of the chairman of Tata motors Mr. Rattan Tata. And with high qualified IT skills people he has shown the Indian talents to whole the world. We probed into the health of Tata Nano as a brand and as a product.

Ideaconceivedby-Rattan Tata Costofdevelopment-1700crores

Manufacturing cost (excluding dealer margin and taxes) -Rs 65,000perunit

DevelopmentofDesign-India

Timefordesigningthecar-4years

Team - A team of 150 engineers, every one below age 28

Biggesthurdle-Tomakeacarcheapcarwithout Compromising design

13.2 TATA GROUP AND ITS SUBSIDIARIES

TATA groups portfolio includes wide range of businesses which are leading in their fields. Its total revenue in 2006-07 is $ 28.8 billion which is 3.2 % of Indias GDP. TATAs business empire extends to over 80 countries across 6 continents. Similar to Jack Welchs opinion that the business should either be first or second else it is better to sell the business, TATA groups companies excel it the fields wherever they started the business. TATA group has ninety eight companies that are basically operating in seven sectors.

13.3 ORGANIZATIONAL INNOVATIONS SYSTEMInnovation in Tata Motors is not a recent phenomenon, but is a part of its legacy. The Companys culture of perpetual search for excellence is highly attributed to the Tatas ethos and incessant efforts of its employees in the past several decades to serve the customers by bringing continuous innovation in its products and processes. The three major areas to illustrate how Tata Motors has effected innovation in the past few years.

1. Products

2. Processes

3. People

PRODUCTS:-

Tata Motors created several breakthrough products in the past which changed the market dynamics and helped in providing a new customer experience.

Platforms in 1980s

Japanese LCV players had made inroads into the Indian automobile market in the 1980s. Tata Motors came out with its innovative 407 platform which was designed to suit the Indian conditions. It quickly became the bestseller in LCVs and the platform still continues control 2/3rd of the market even in the third decade of its existence.

Indica in the late 90s-

This was the first indigenously designed passenger car in India and it was innovative inThe sense that it provided more value for money in terms of internal space Features and all that at a very competitive price

ACE

Ace was Indias first mini-truck launched in 2005. While heavy trucks ply on the Highways, research showed the need for a small sub one-ton truck for intercity and truck terminal-to-nearby locations connectivity. The vehicle offered 4 wheeler functions a laity at 3 Wheelers price. The unconventional design features used in the vehicle were: Innovative 2 cylinder Indica engine Semi-monologue body to withstand abuse Rigid front axle and rear wheel drive for low cost Flat face vs. semi-forward face to enhance the loading space.

NANO

The target price itself became the source of innovation, as you all must have read that the big names in the industry just rubbished it as false claims and commented that it was impossible to make a CAR at that price. However, you all know that the promise was kept.

This was made possible through series of innovative ideas which led to acquisition of 37 patents by Tata Motors. Engine was packaged on the rear side.

2 cylinder engine (conventionally there are 3-4 cylinder engines)

Identical handles and mechanisms for left and right side doors. Instrument cluster in the middle of the dashboard.

Unconventional seats Interior space was maximized by pushing wheels to the corners and power train below the rear seat.

Product created was very contemporary and it has sufficient Space inside to accommodate 4 persons comfortably. Highly fuel efficient

WORLD TRUCK

The new generation range of trucks which would match with the best in the world in performance at a lower life-cycle cost is being unveiled in just a few hours from now. It will create a new benchmark in India in terms of power, speed, carrying capacity, operating economy and trims and a new experience for the drivers in terms of drivability and comfort.

PROCESS:

Sustainability of innovation in products needed to be complemented with innovative changes in the organizational processes too. Some examples are:

1. Adoption of the Tata Business Excellence Model (TBEM)

It is based on Malcolm Bald ridge Award for business excellence and Balance Score Card. This has created a culture of exploring various innovative ways to achieve excellence in all the organizational processes.

2. Use of IT systems:

It has been a benchmark and highly leveraged in the organization throughout the VALUE CHAIN.

3. Supply Side

Free-Markets for e-Sourcing, Supplier Relationship Management (SRM).

4. Product Development Process.

Institutionalized Stage Gate process in the organization is a benchmark in itself and ensures development of right product for the market and also an effective and efficient program management. Transition from in-house product development to a collaborative product development, utilizing the capabilities of suppliers, design houses, subsidiaries and associate companies specializing in different verticals. Internalization philosophy of Tata Motors made some major global acquisitions like TDCV, JLR, Hispano, etc. Unlike many other Japanese / US players, they followed an innovative approach to be seen as a local company in the country of operation, i.e., as a South Korean player in South Korea and as a Spanish Player in Spain. This has helped them to appreciate the need and importance of all the stakeholders and they achieved this in four stages. This involves Initiating, by understanding the language and basic facts of the country, Familiarization with their culture, Harmonization and finally Synergizing by sharing the best practices and work ethics. People:-

The changing business environment and increasing complexity of business posed a huge challenge in achievement of business plans. Tata Group, of which Tata Motors is a part of, is well known for identifying and nurturing leaders. Tata Motors in the past has adopted several innovative means to leverage its human resource capabilities for achieving extremely challenging goals.

Identifying leaders through assessment centers

This process has been effectively utilized by Tata Motors to identify young managers with very high potential. This process was started some 20 years back and has progressively created a pool of very strong and effective leaders who have proven their capabilities in some very challenging assignments given to them. This process has now been replicated by many other organizations too.

Putting them into challenging assignments and giving them International exposure Key projects like ACE and NANO are examples of some challenging projects which constituted of young leaders and engineers.

Breaking the functional silos by shifting from a hierarchical organization to a more CFT approach

All these experiences have helped us to redefine the way we have looked at innovation. And while innovation is normally understood as introduction of new and radical ideas in the area of products and services, our experience says there are several other areas that also require innovation in tandem, so as to effect an innovation in a company. Three of them I have already mentioned, that is, product, process and people. Four other areas of innovationSource of inspiration Purpose from which the concept emanated, which stresses upon the fact that agility and understanding the unstated/ unfulfilled need of customers is the most important source of innovation. Tata Nano: In this case the idea struck in the mind of our Chairman when he saw a family of four (a man, his wife and two kids) riding on a scooter on a rainy day. He felt that there was an unfulfilled need of safe, affordable and an all weather alternative.

Place/Reach:-

Conscious of the fact that demand for such cars would be substantial from the remotest corner of the country, the sale of form for booking were facilitated through several banks. New insurance schemes were co-designed with the insurance companies, and now we are in the process of enhancing the sales and service network for better reach and service to the customers. To summarize the experience, path breaking ideas, conceived and implemented in one or more of the 7 Ps, leads to INNOVATION. Purpose Product Price Place Promotion People Process

IDEA GENERATION

The main idea behind TATA NANO was perceived by the chairman of TATA group himself who saw a family of four going on a scooter in rain he wanted to develop a transport which was affordable, safe and could face all types of weathers. This turned out to be the most ambitious project of Tata motors till date when Mr. Ratan Tata told this to one of his managing directors Mr. Ravi Kant he was also interested about the idea. Mr. Ravi Kant had learned from his experience that People want to move from two-wheelers to four-wheelers but they cannot afford it More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month. If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian 19 terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year.IDEA SCREENING

The next step was screening of ideas. There were many ideas like to make a scooter with two extra wheels at the back for better stability, A three wheeled car like a closed auto-rickshaw but the market requirement was a car, the car should be such that it doesnt convey a message that its just an extension of a scooter it should be a proper car and likewise should also give the feel of a actual car. Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed unachievable several years ago when Mr. Ratan Tata, chairman of Tata Motors had first mentioned his dream of building a one-lakh car in2003 at that time the whole world thought that this gamble will never work out but ironically the whole world is now talking of small cars as $5,000 or $7,000 after TATA NANO was launched in 2009.

Price: - The price of Nano got fixed at Rs 1 lakh (2500USD). The achievement of price target was definite to create a major disruption in the car market as it fell midway between the price of a scooter and the cheapest car available which was priced at Rs 2(5000USD) lakh. Product design was choked for options because of the price target. Hence the setting the price as target triggered a series of innovation which involved:

Target Cost approach which involved breaking down the cost targets to sub-system and then to component level. Suppliers were challenged with the stringent cost target given to them, but they accepted the same and the result is in front of you.

Promotion:- Innovation lies in reaching the right customers always and communicating in a simple and effective manner. Tata Motors in case of Nano developed a portal, which got as high 30 million hits even before the launch of the car. After the launch there were another 30 million hits in less than a month. This helped the customers in becoming more aware of the 27. Our vision:- To be a world class corporate constantly furthering the interest of all its stakeholders. To develop TATA into a world class Indian car brand for innovative and superior value vehicles. 27. Our Mission:- To be the most admired multi-national Indian car company producing vehicles that people love to buy. Create an organization that people enjoy working for doing business with and investing in product features. They received around 2 lakh (2 million) applications, which is a good response by all standards.

27. VALUES:-The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance group synergy and becoming globally competitive is ourchosen route to sustained growth and long-term success.

27. New Product development:-

Before the introduction of a product into the market, it goes through several stages of development. The stages of the product development includes the following Idea Generation Idea Screening Concept Testing and Development Market Strategy Business Analysis Total Sales Estimation Estimation Costs and Profits Product Development Test Marketing

As far as Nano is concerned, it falls new to the world products in the context that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis.

CategoryPlayers200220032004200520062007

AMaruti 80028242114107

BAlto,WagnorR,Santro334147576475

,Indica

CEsteem, Swift,121518222633

Indigo, Ikon, Ascent

DMercedes-C, Skoda1234

Superb

P/LMercedes-E, BMw111111

74818896104120

Average Monthly Category Sales

27.1. IDEA GENERATION

The main idea behind TATA NANO was perceived by the chairman of TATA group himself who saw a family of four going on a scooter in rain he wanted to develop a transport which was affordable, safe and could face all types of weathers. This turned out to be the most ambitious project of Tata motors till date when Mr. Ratan Tata told this to one of his managing directors Mr. Ravi Kant he was also interested about the idea. Mr. Ravi Kant had learned from his experience that People want to move from two-wheelers to four-wheelers but they cannot afford it. More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month. If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian 19 terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year.

27.2. IDEA SCREENING

The next step was screening of ideas. There were many ideas like to make a scooter with two extra wheels at the back for better stability, A three wheeled car like a closed auto-rickshaw but the market requirement was a car, the car should be such that it doesnt convey a message that its just an extension of a scooter it should be a proper car and likewise should also give the feel of a actual car. Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed unachievable several years ago when Mr. Ratan Tata, chairman of Tata Motors had first mentioned his dream of building a one-lakh car in2003 at that time the whole world thought that this gamble will never work out but ironically the whole world is now talking of small cars as $5,000 or $7,000 after TATA NANO was launched in 2009.

27.3. CONCEPT TESTING AND DEVELOPMENT

After surveying customers the end result was that people wanted a four wheeler which was cheap, dependable and strong enough to carry a load of 1 ton additionally four wheelers also increased the social status of the person who owns it .Four wheels not only practical appeal but also had a emotional appeal. Thus the new product was now to be developed but the following considerations would have to kept in mind when developing it- The car should be built on a different platform than conventional ones. It must be meeting all the safety and regulatory requirements. It has to be built on a scale which shall be more than double the earlier launches of similar products and the ramp up must be smooth. The car has to be designed so that it can be exported to other countries as the domestic demand may not materialize as per projections.

There were three main requirement of the new vehicle: it should be low cost, adhere to the regulatory requirements, and achieve performance targets such as fuel efficiency and acceleration capacity. Nearly 500 engineers were involved in the development of the vehicle and everyday they had meeting so that the decision taking and the problem solving process could be accelerated. Each engineer represented a different part of the car: engine and transmission, body, vehicle integration, safety and regulation, and industrial design. The body of the vehicle had to go under a number of iterations because the Mr.Ratan Tata wanted that a person whose height is over six feet can also fit into the car without any discomfort and finally the length of the car had to be increased by 100mm but eventually. The hard work of designing the car paid off and the designers were successful in their attempt to design an actual car which did not look shabby and inexpensive but looked sleek and sophisticated.

27.4. BUSINESS ANALYSIS:

COST:

Since the car had to be built within a cost of Rs. 1 Lac, no conventional design would work as the costs shall be higher and so the entire car has to be redesigned.

The design has to question the need of each and every component from the point of view of its necessity of existence and also the minimum requirements of its functionality. Value Engineering concepts have to be deployed to finalize the minimum requirements.

27.5DISRUPTIVE TECHNOLOGY:

Its a technology which brings radical change by introducing new ways of doing things. Technology that is significantly cheaper than existing Technology. Much higher performing. Has greater functionality and Is more convenient to Use.

Brings to market a totally different Value proposition than the one available and can cha The Guiding factor was that the cost has to be minimized for each component yet maintaining its basic functionality. The Alternatives are. Reduce Consumption of Material being used. Alternate Suppliers to get same material at fewer prices. Use alternate materials. Eliminate use of Material. Eliminate a process Or a Combination of the above.

27.6COST REDUCTION

Value Engineering Alternatives:

The target was very clearly defined that, within the given cost structure all the components have to be allocated and the same had to be achieved using the available alternatives. The Guiding factor was that the tax structure on materials and manufacturing must support the final cost. Decisions were Establish factory in a tax free zone.

Get the tax advantages on infrastructure development.

Get the suppliers to establish base near the factory.

Get special concessions from State Govt.

In short select a manufacturing location where all the advantages could be achieved.

27.7. TOTAL SALES ESTIMATION:

The total sales had been estimated based on the following decisions It was estimated that the demand for the peoples car shall be at least twice the demand for Maruti 800, the lowest end car.

Initial projections were at about 500,000 cars per year.

The basic reason was the conviction that the target price shall redefine the 4 - wheeler segment.

It was decided to set up plants with 5 lakh cars per annum capacity and ramp the same up in stages, in line with increase in market demand.

32.Competitors:-Tata Nano and Maruti 800.

Tata NanoMaruti 800

* The Nano'strunkis only accessible from inside the car, as the rear hatch does not open.* Maruti 800 initially had only an opening rear-windscreen, but later got a full hatchback.

* One windscreen wiper instead of the usual pair (also seen earlier on certain Citroen and Mercedes models)* Two windscreen wipers.

* Nopower steeringinitially, unnecessary due to its light weight. Added in higher variants in later models.* Power Steering only in higher variants.

* Threelug nutson the wheels instead of the usual four (also seen on Smart)* Fourlug nutsper wheel.

* Only onewing mirroron base models. Higher variants fitted with passenger side ORVM from 2012 onwards.* No option for both side ORVMs in any variant.

* Radio or CD player is optional (the idea picked on some basic car models in North America and all basic cars in India)* Radio/CD Player is optional.

* No airbags on any model* No airbag in any variant.

* 624cc rear engine has 2 bigger cylinders (312cc each)* 800cc front engine has 3 smaller cylinders (266cc each).

* No air conditioning in base model (as on most basic car models in Europe and North America)* No air conditioning in base model

* Front passenger seats same as the driver seat, and the headrests are integrated.* Front passenger seats same as the driver seat, but headrests separate. Later models switched to integrated headrests.

* Thinner 135/70-R12 space saver spare tyre.* Full size spare tyre.

* No external fuel filler cap. Fuel inlet is accessed by opening the front hood.* External fuel filler cap.

* Front door power windows only offered on highest variant. PW switches placed on central console rather than on door pads.* Front door power windows only offered on highest variant.

Maruti 800, Tata Nano and Bike Rival car makers including Bajaj Auto, Fiat, General Motors, Ford Motor, Hyundai and Toyota Motor have all expressed interest in building small cars in India that are affordable to more middle-class consumers in emerging markets. The bulk of demand there is for small cars because people are much more sensitive to fuel prices. Honda and Toyota are leading the way on so called cleaner gasoline-electric hybrids, and some environmentalists argue getting prices down on these technologies is where efforts should be concentrated. Inexpensive and eco-friendly electric-cars like Tara Tiny (which has an engine producing 4 hp compared to Nano's 33 hp), Oreva Super (both reportedly even cheaper than Tata Nano) and REVA pose even more significant danger to Nano. There are also rumors of Maruti Suzuki introducing a lower priced version of Alto to counter Tata Nano.

Maruti 800Tata NanoBike

Engine796 cc623 cc100 cc

Price(OTR)Rs 225,000Rs 120,000(88%)45,000

DPRs 10,000Rs 10,000Rs 5000

EMI(60m)Rs 3583Rs 1833(95%)Rs 667

Kmpl152050

Nano vs. Maruti 800 Vs Bike- Ownership Cos

34.Cost Reduction:-Cost reductions As far as Nano is concerned, it falls into new to the world products in thecontext that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis. It can also be considered as new product in the since of costreduction as it is the first time in the history that such a cheap car is produced. The story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of today an eager, ambitious nation with a combination of engineering talent, a desire for low costs.

35. Advantages of Cost Reduction:- Increases profit dividends to shareholders. Money for labour welfare schemes. Goods will be available at a cheaper rate. Meets competition Revenue to government bytaxation.Export price may belowered. Cost reduction is obtained by increasing productivity. Cost reduction lays emphasis on continuous search for improvement which will improve the image of the firm for long term benefits.

Dangers of Cost Reduction

Quality may be sacrificed at the cost of reduction in cost. Cost reduction program me may not be liked by the employees. Reduction in cost may not be real and permanent

35.Scope of Cost Reduction:-Cost reduction is attainable in almost all areas of business activities. There isperhaps no situation which cannot be improved. It covers a wide range like new layout, product design, production methods, materials and machines in factories as well as in offices, innovation in marketing etc. it may also extend to specified activities like purchasing, handling, packaging, shipping, warehousing, marketing, use of administrative facilities and even the utilization of financial resources and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nanoon average aged between 25 and 30has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in anunexpected side-benefit called "organizational innovation.

Chapter-2

36.MARKET: -

Product:

Tata has a very wide range of products it has passenger cars, utility vehicles, Trucks, Commercial passenger Carriers and Defense Vehicles. Nano received media attention due to its targeted low price. The Tata Nano is a rear-engine, four passenger ,city car built by Tata Motors, It was first presented at the 9th annual Auto Expo on 10 January 2008, at Pragati Maidan in New Delhi, India. Aimed primarily at the Indian market.

Price:

The prices of Tata motors are generally affordable acceptable by the general public at large. Tata always have something for the lower class people with Nano being their trump card. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Discount can be made from Companys profit or from dealers profit at certain range.

Pricing strategies: Penetration pricing Low pricing policy with minimum profit margin. Though the one lakh price tag is not fixed by TATA group, it was the word of mouth of people which fixed that range. This expectation of people creates a big challenge for the company.

Place:

Tata Motors has an extensive dealer network covering Indian and International markets. Wherever you are, there is a Tata Motors Sales and Service dealership close to you. The channel of distribution, physical location, and dealership method of distribution and sales is generally adopted. The distribution of vehicle must be in a very systematic way, from the plant to dealership and to end user. This is not only in India itself but also to the World-wide dealership.

Promotion:-

Tata motors promote their products via Advertising and after sales services.

Enough use of one of the most important element of promotion mix, publicity reduces the necessity of other promotional devices for Nano.

Publicity as One lakh car by mouth to mouth.

Auto expo 2008,New Delhi & Geneva

Publicity through print & electronic media

For other type of promotional activities, cost factor that is 1 lakh price tag is to be keep in mind, Nano watches, Nano T-shirts available in retail clothing stores. Advertising: - TV & other mass media will be less effective, thus too much money will not be invested in this regard. Mainly word of mouth advertising will get more emphasis. Internet will be a major media for advertising.

People:-

Tata Motors owe their success to the highly motivated and talented staff. There recruitment division picks the crme-de-la-crme from premier universities, management and engineering institutes in India. They put them through rigorous training programmes to hone their entrepreneurial skills and impart comprehensive product knowledge.

Processes:-

Tata motors follow Balanced Scorecard Collaborative, Inc for achieving excellence in overall Company performance.

Physical Evidence:-

The management of the company has managed to keep their hopes alive even in this recession and hoped that the worse is behind Tata Motors recently launched the most awaited car of the year, Tata Nano and the company had already received 203,000 booking that are fully paid and 70 percent of the applicants are ready to wait till the end of 2010 for the car to be manufactured.

5. INNOVATIONS INCORPORATED IN TATA NANO:

At this moment, a fair amount of information on how the Nano was brought to its intended price tag without compromising its design brief - 'a proper car'. The report attempts to study the tactics and policies adopted by Tatas under the enlightened approach to innovation.

Strategic Innovation

Focused Innovation

Holistic Innovation

5.1 Strategic Innovation:

Some of the innovations that Tata Motors followed during the process of coming out with

Nano were not only concerned with the only the car as the product, but extended itself to the whole organizational thought process. Starting from the team formation to product delivery, everything was thought keeping in mind the promise of bringing out a quality car within a price tag of Rs. 1 lakh that would fulfill the latent demand of the Indian middle class who could not afford even the lowest priced car at that time.

The whole idea was radical and required fresh thinking and challenging of age old principles of product designing and manufacturing technologies. In line with this, the engineering team in charge with the designing and production of Nano was very young with the average age being only 28.

Tata Motors were not shy to unlearn and re-learn the processes and they were open to take in ideas from their strategic partners also. During development, the company reinvented and minimized the manufacturing process, brought in innovative product design, and asked component manufacturers to look at current work and design approaches in a different perspective to produce logical and simple solutions.

The strategy behind the project was the awareness of the number of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and was based on the company's success in producing the low cost 4 wheeled Ace truck in May 2005. The company management learnt and improved on the design procedure of Ace truck and used this know-how to come up with the best design for Tata Nano. Also, since both the vehicles were similar in their basic design and component requirement, the supplier base was also easier to be put in place.

Tubeless tires further enhance safety.

The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint.

The mono-volume design establishes a sea of change from the two-box layout of the 800. What it ensures the Nano with is extremely short overhangs and tight packaging. For a car of this size and image, the Nano is an extremely sexy looking car with futuristic design cues. The bonnet line is steep and unites together with the bumper in a seamless way.

Even after successfully launching the petrol and diesel variants of Nano, Tata Motors have not rested on the laurels. They have taken one step further in coming out with an electric version which enables them to position it as an environment friendly car of the future. This shows the foresightedness of the management to sense future demand and also the company culture to continuously innovate and improve.

Tata Motors set their retail price target before they designed the car. Doing so let them establish their demographic. Setting the price and working backwards also required a fundamental shift in the way the car was designed, since many costs are fixed once the design is set.

Workers at the Tata Motors factory have been trained in Japanese manufacturing techniques that call for continuous improvement.

5.2 Holistic Innovation:

Tata Motors worked in collaboration with their suppliers very early in the process - so early in fact that they were able to provide functional goals for many parts rather than technical specs (i.e. wipe water from windshield vs. windshield wiper must be x mm by y cm and work at z cadence). This approach tapped the ingenuity of the supply chain, who delivered parts that met the functional requirements and extremely low prices.

Another cost cutting strategy Tata Motors distributed assembly model, where they ship the parts to local manufacturers for final assembly. The next strategic thinking Tata Motors have to undertake to check if the policy can be applied to all the other car models to allow them to be customized as per the local customer needs.

Working closely with the sourcing team led to many interesting inputs on what was possible and what was not. The driving instrument cluster is uniquely placed in the centre, giving the car an open look and enabling everyone in the car to look at it. It also makes the dashboard equally amenable to left hand and right hand driving.

The top management, even Mr. Ratan Tata was actively involved in the designing phase of the car. Inputs from all the teams were taken to come up with the best design.

Manufacturing planning: The interesting challenge here was that aiming for a very low cost car meant the entire organization had to be leaned down not just manufacturing, but materials, design, human resources, and so on. The team has taken the benefit of best practices from other industries such as cycle manufacturing or PC manufacturing that involves mass manufacture and assembly. Quality systems have been thought about, put in place and well documented well in advance; so implementation becomes easier. The maintenance practices - failure mode analysis and development had all been completed. This ensured all this during the planning phase itself and this reduced the breakdowns when the project started and cut down unexpected challenges once the actual implementation started. Suppliers located within 50 kms of the main manufacturing plant which reduces transportation cost and fosters just in time procurement strategy.

Sales Graphs:-

45.Market Share:-For the Malaysian market, TNM will implement the market-penetration pricing, which is to set a low price for a new car in order to attract a large number of buyers and a large market share. This will be done by achieving high sales volume, which will results in falling costs, allowing the company to cut its price even further. We are positive enough that the Malaysia car market is highly price sensitive, as a low price produces more market growth.TNM is alsoconfident that production and distribution costs willfall as sales volume increases and the low price of Nano cars will help to keepoutcompetitionandmaintainitslowpriceposition.ThelowpriceentrywillprovideMalaysians consumers with a viable alternative to PerdueMalaysiasecondNationalcar.FurtherliberalizationisexpectedasMalaysiaimplementstheASEANFreeTradeAreaagreement, which commits the Malaysia Government to scrap foreign cartaxes.4045.Advertising:-

Photos and videos, the web site links to recent news about Tata Nano and space for public feedback. Besides that, Blogs have become an important outlet for word of mouth which is regularly updated online diaries. Blogs is bringing together people with common interests. They vary wide and can influence a vast audience due to many internet users have read Blogs. We can establish the blog network and carefully monitoring to find out what's on people's minds especially thepotential customers. This is a cheapest and good way to build up brand awareness.Television Advertisement:-Television advertisement is very expensive but this is the most powerful to perform the Tata Nano to the public by demonstrating Tata Nano attributes and persuasivelyexplainingtheircorrespondingconsumerbenefits.Byloweradvertisingbudget,wecannotdotheTVadvertisement in whole day, so we just choose the prime time (7pm 11pm) to place the advertisement. By properly designed and executed TV advertisement can improve brand equity and affect sales and profits.RadioAdvertisement:-Most of the Malaysians listen to the radio daily. Now a day has many facilities such asMP3, hand phone and so on, is convenience for the people to listen the radio anytime at anywhere, this is a cheap and pervasive medium for us to create the brand awareness by repeatedly listen theadvertisementandthe brandname. Advantages ofthe radioadvertisement are flexibility, quick response and also moreeffective media for reaching teens.NewspaperAdvertisement:-Beside that the radio,most of the Malaysians also willsaw a newspaper every day.Sothisisgoodmarketcoverage.Fromhere,TataNanocangetthebroadacceptanceandgoodreputationfromMalaysians.Newspaper advertising is inexpensive.MarketingCampaign:-This Marketing campaign is base on every four month:Marketing CampaignforJuly 2009 toOctober2009Tata Nano will lunch at Malaysia on July 2009. Launching program is very important forpositioning which is the act of designing Tata Nano and image to occupyMalaysiainthemindsofthetargetmarket.Launchingprogramalsoisoneofthepromotionstrategies tobuild awareness, through launchingat public center Tata Motor will introducethe Tata Nano tomarket. In July and August, we focus on marketing campaign which will take place at all the IPTA and IPTS which have organize the convocation, by providing product display and banner; and thepeoples can have the experience with Tata Nano by provide the opportunities to drive Tata Nano around the campus. Theme for this campaign is 'Good future with Tata Nano'. Reason for this marketing campaign is one of ourtargets are students such as fresh graduate who just get thenewjob and also the international students. Fresh graduate need the transportation in their working life but they can't afford to buy the too expensive car; international student just need the carwhich is economy and using it in short period around 2-3years for their student life in Malaysia. This is cheapest cost by event orcampaign in the campus. In September and October, Malaysians will celebrate two big festivals together; there areHariRaya Puasa Aidifitri and Deepavali. So we can focus on lower income group with family especially those are come from Malay family or Indian family. Use the mail, telephone, fax, e-mail to communicate directly with them. Base on historical, more of the Malay or Indian will beside that the radio,most of the Malaysians also willsawnewspapereveryday.Sothisisgoodmarketcoverage.Fromhere,TataNanocangetthebroadacceptanceandgoodreputation from Malaysians. Newspaper advertising is inexpensive.MarketingCampaignThis Marketing campaign is base on every four month:Marketing CampaignforJuly 2009 toOctober2009Tata Nano will lunch at Malaysia on July 2009. Launching program is very important forpositioning which is the act of designing Tata Nano and image to occupyMalaysiainthemindsofthetargetmarket.Launchingprogramalsoisoneofthepromotionstrategies tobuild awareness, through launchingat public center Tata Motor will introducethe Tata Nano tomarket. In July and August, we focus on marketing campaign which will take place at all the IPTA andIPTS which have organize the convocation, by providing product display and banner; and thepeoples can have the experience with Tata Nano by provide the opportunities to drive Tata Nano around the campus. Theme for this campaign is 'Good future with Tata Nano'. Reason for this marketing campaign is one of ourtargets are students such as fresh graduate who just get thenewjob and also the international students. Fresh graduate need the transportation in their working life but they can't afford to buy the too expensive car; international student just need the carwhich is economy and using it in short period around 2-3years for their student life in Malaysia. This is cheapest cost by event orcampaign in the campus. In September and October, Malaysians will celebrate two big festivals together; there areHariRaya Puasa Aidifitri and Deepavali. So we can focus on lower income group with family especially those are come from Malay family or Indian family. Use the mail, telephone, fax, e-mail to communicate directly with them. Base on historical, more of the Malay or Indian willbuy the car before festival. 'Raya with Tata Nano' can be the theme for our campaign at thisperiod, and promotethem Tata Nano ischeapest andsafety.Marketing Campaign forNovember 2009 to February 2009In November and December, Malaysia have the Mega Sales due to Merry Christmas andNew Year in the end of the year at wholeMalaysia so that have many peoplewill go to shopping. We can organize the event at shopping centers in Malaysia such as KLCC, Midvale, Berjaya Times Square, and Sungai Wang by providing product displayand banner. On Januaryand February, most oftheemployeesin Malaysiawill getthebonus inthisperiod sothepurchasingpowerwillincrease.BesidethatChineseNewYearisatFebruary.Sendthebrochurestothesmallandmediumcompanyorofficeanddotheintroductionorbriefingtothem.Followbymail,telephone,faxoremailtodevelopingeffectivecommunication.Marketing CampaignforMarch 2009 to June 2009We will do the road show at every state (whole Malaysia). We can have the road show atthe center market such as all market at all the state. Have many people will go to market early morning to buy the vegetable, take the breakfast or buy the necessary things. Most of them are women or house wife who may be come from the lower or medium income family. Some of them go to Passer by motorcycle or by bus. There are our target markets. We can promote Tata Nano to them such as, Tata Nano is the cheapest car in the world, Get the Tata Nano to be second car fortheir family member especially for their children or elder parent, 'Easy life with Tata Nano.Housewife wife or mother can goto Pasar or anywhere by Tata Nano better than motorcycle or by bus for complete their daily matter more effectively. When the women get the news, they will pass this news to their friend immediately. This will help us to promote Tata Nano effectively in the local society. At the road show, people also can get the experience with Tata Nano by have the opportunities to drive the Tata Nano car before purchase it.48.Channel of Distribution Strategies:-48.1Direct marketing channel (zero-level channel)We perform the Tata Nano in Malaysia by selling it directly to customers. Customers candela directly with our dealers and make the booking for Tata Nano by visit our sales office or at any special event/campaign. Besides that, customers also can get the information or make thebookingvia thetelephone (1-800-88nano) andthroughthe Internet. By this way wecan savemore cost andmaintain thecheapest purchasingprice rather than through retailers or resellers.48.2PhysicalFlow:-From the diagram, can know that Tata Nano will send the paths to the Malaysia afterreceived the order from the sales office. After that, we will assemble a car at the work shop. Finally, send to the customers directly. From here, we can often provide faster delivery to customers because we are closer to thecustomers.48.3PaymentFlowCustomers can pay bills by cash or do the financing from bank. Customers pay less by this diagram due to not need to pay extra commission to third party such as wholesalers orretailers. Tata Motor also cancollect the paymentmore efficient. ManufacturerCustomers Tata Motor at India Transporters, Warehouses Assembly Workshop at Malaysia Customers Tata Motor at India Sale Office atMalasiaBanks Customers Banks49. POSITIONING:- Positioning concept is applied extensively by the companies in emerging markets like India. After taking the decision to segment the market, i.e. To select one or various segments as target customer groups, the next step is to decide how the product should be perceived in the customers minds and this process is called as positioning. The origin of the term Positioning goes back to Trout and Ries (1969), who define it as a strategy for staking out turf or filling a slot in the mind of target customers.. The Positioning has, therefore, nothing to do with what you make of the product. Positioning is what you do with the target customer. Kotler (1997) defines positioning as: the process of designing the companys product/services and image based on consumers perceptions relative to that of competitors. Aaker and Shanby (1982) defines Positioning as a art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition. To Kapferer (1992), positioning is a two-step process, in which the first step is to clarify which product category the brand should be compared to and associated. In the second step, the brands differentiating characteristics are identified and communicate. Further Arnott (1992) states that Positioning is the deliberate, proactive, iterative process of defining, modifying and monitoring consumer perceptions of a marketable object. In other words, the process of positioning can be described as iterative, it necessitates deliberate and proactive actions; it involves decisions at conceptual, strategic and operational levels and should reflect the triumvirate deliberations of the company, its competitors and its target market/customers Kalafatis et.al (2000). Most of the companies in Indian emerging market position their brands more or less by developing a particular set of product attributes, by price/quality, by competitor, by application, by product user, by product class or by the cultural symbol approach aimed at a customer segment. Generally, there are 3 major aspects of brand positioning - Functional, Symbolic and Experiential; an effective positioning process should place enough importance on all of them, though mostly one of the aspects becomes more important compared to others depending on the product type and competitive dynamics. It can be argued that in the Indian car market most of the passenger cars competing in a segment have more or less similar features with marginal differences depending on the target segment. Hence, symbolic and experiential aspects become very important in terms of positioning.

50. Tata Nano Positioning Strategy:- Every consumer is highly unique and a complex human, yet there are many things consumers have in common when it comes to buying. Many factors are involved in their buying decisions. According to H. S. Adithya (2013) while selecting a car, the consumers considers many factors like price, fuel economy ,driving comfort , maintenance cost , attractive model , status symbol , resale value , latest technology and brand image and in India companies try to use these factors as differentiating planks to develop their positioning strategies. Tata Motors wanted to develop the effective positioning strategy for Tata Nano in India. Because one of the most important aspects of successfully marketing a product is Positioning. In fact, brands can succeed or fail depending on how they are positioned. As the target customers for Tata Nano were lower and middle income families, who aspire to upgrade to 4- wheelers from being 2-wheeler users and since many of such families stay away from purchasing 4- wheelers primarily due to the affordability factor .Management at Tata Motors tried to focus on the price factor and developed Price Positioning Strategy for Tata Nano. Tata Nano tried to position itself as the most Affordable Car in the world. The former Chairman of Tata, Mr. Ratan Tata, has envisioned Tata Nano to become a Peoples car. The car was positioned as a peoples car since it offers comfort and affordability to every person but Tata Nano got positioned as the poor mans carandcheap car. 51.2 Failure of Positioning Strategy The reasons for Nano getting wrongly positioned was the failure of its primary positioning strategy i.e. Price Positioning Strategy. Tata Nano was positioned on the price attribute dimension and was widely publicized as the world's cheapest car at 1 lakh. While the Endeavour was presumed to be an exciting, and brilliant societal, for any consumer buying the Nano, there is the inherent danger of being viewed by his social group as poor as they owned a car that is thought off as cheap. Because of the intense perception of class position in India, it turns out that many poor people would rather buy a used, higher-end car than buy a Nano, which would mark them as poor. Also because in India price serves to signal quality i.e. higher price serves to signal higher quality and lower price serves to signal lower quality to the customer. (Aaker and Shanby, 1982). Further Within a few months of initial sales, technical problems were found in the product and there were a few reports of Nano catching fire, which further weakened the trust for the brand Nano .and people further believed that low price is because of low quality. Thus Nano though a good car did not carry enough prestige to be a passenger car. Positioning is an ingredient of total strategy, Product, brand, price, promotion and distribution must all be consistent with the positioning strategy But Tata Nanos positioning strategy and communication tactics didnt gel with each other. While Nano was intended by the company for the lower-end belt who are price conscious, instead of reaching out to the intended segment. Tata Motors relied heavily on non-conventional methods like social-media: They created a special Nano website where one could design their own Nano and play games; used social networking sites such as Face book and Orkut; leveraged blogs; and purchased online advertising. The online medium was hardly the right way to sell to their target segment and the strategy failed to create buzz around the car. The sales reflected this. Half of the Nanos purchased were second cars, clearly violating the positioning which sought to transition people from two wheelers to four wheelers. The lack of communication to the appropriate customer segment led to the downfall. Tata Nanos distribution system was not also consistent with its positioning strategy .The Nano did not have a large enough dealer network in the rural areas and smaller towns where the positioning by price was more relevant. The paucity of dealer networks meant they could not capitalize on the initial enthusiasm and interest. It was targeted at the small family of four which owns a two wheeler and would want to upgrade to a car. The target market knew how to buy scooters but they didnt know how to buy cars. In India the two processes are completely different and it appears that many people were simply intimidated to go into a car dealership. Tata doesnt sell scooters and appears to have underestimated this issue. The distribution strategy failed to bridge the last mile to the consumer segment that Tata Motors built this car for. Lower income customers were apprehensive and hesitant to walk into large Tata Motors showrooms.51.3Tatas Strategies for Revival Tata Motors tried to correct its 4Ps , Firstly Tata Nano was re-engineered to fix the issues related to the fire and customers were offered free safety upgrades for, their Nano. Secondly In September 2010, Tata Nano tried to reach its target segment through electronic media channels but the advertisements have unfortunately been featureless and catering again to the theme of affordability. Especially with cars people want to own something they can aspire for and be proud of. They want to feel excited about it. On retrospection, the first ads were perhaps not the most appropriate. They showcased couples in traffic ensconced in Nano, while those on two wheelers stared at them balefully. The focus in advertisements has only been on safety and relative comfort over the two-wheeler but nothing exciting or incredibly desirable. The next campaign focused on the tier 2 cities with bad roads and little or no inclination to move things along. , with an ad that featured a young girl in a decidedly rustic setting, awaiting the family Nano. This further hit the car sales. Tata Motors also placed a new and unconventional distribution system, Tata Motors set up 210 'F Class showrooms', each only about 500 sq ft in size and stocking just one car in smaller towns, and hired 1,200 people to man them. The F-class showrooms are less intimidating than the 3,000-4,000 sq ft conventional showrooms, and are attracting walk-ins. "Tata Motors' focus on tier-II cities is a correct strategy since these are natural markets for the Nano Second, it tied up with value retailer Big Bazaar to gain traction among the 150 million footfalls the retailer gets every year. "There is a Nano parked in every Big Bazaar outlet and the touch and feel experience has accelerated decision-making, especially in smaller towns," The chain has 70 outlets in smaller cities and towns. This however contributed to increase in Nano sales for a short period of time. Further Tata Motors Finance (TMF) launched a special Tata Nano finance scheme, under which a customer was able to get a loan with select documents in just 48 hours. TMF provided finance up to 90% for the Tata Nano, at easy rates. Bank loans for Nano were made cheaper compared to the regular fare of car finance. To make the most of the Nano euphoria and grow business in the process, Nano financiers gave discounted interest rates -- which are tipped to figure at 50 to 150 basis points (bps) lower than regular car loan rates. The Tata Nano gave its 4-year / 60,000-km (whichever is earlier) manufacturers warranty, at no extra cost on new deliveries, and to all existing owners of the car. Though management at Tata Motors tried to correct mistakes like promotion, distribution and financing. It couldnt help Nano to grow and if we see in volumes Tata Nanos journey is appalling. Since its commercial launch in March 2009, the number of Nano cars sold till October 2013 within a span of four-and-a-half-years is over 2.41 lakh (Indian Express, 2013). So lately Tata recognized the fact that there is a need for repositioning Tata Nano.51.4 Repositioning Strategy:- Positioning often has very little to do with the product, it can be changed without necessarily changing the product. So when a positioning fails, a product may be repositioned given a new identify. Often, products are repositioned to target a different audience. According to Jack Trout (2010). Repositioning is how we adjust perceptions whether the perceptions are about you or about your competition. The road ahead for Tata Motors continues to be challenging, yet full of opportunities but Tata Motors is committed to improve its customer-centricity, to better understand customer needs and translate them into exciting and appropriate products for their The Nano has 21% more interior space and 8% smaller exterior, when compared with its closest rival, the Maruti 800. The car will come in different versions, including one standard and two deluxe variants. The deluxe version will have air conditioning, but no power steering. The use of a rear mounted engine to help maximize interior space. The Nano complies with Bharat Stage-III and Euro-IV emission standards. Fuel economy : 20 kilometers per liter The car conforms to environmental protection, and will have the lowest emissions in India. Thus it douses the fear in the mind of the environmentalists about it being the reason of shooting up emission limits for mass adoption as well as the perceived notion of cheap products being of bad quality. The Nano will also replace many overloaded and worn-out two-stroke polluting vehicles, both two and three-wheeled. With a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres, with adequate ground clearance, it can effortlessly man oeuvre on busy roads in cities as well as in rural areas. Its mono-volume design, with wheels at the corners and the power train at the rear, enables it to uniquely combine both space and maneuverability, which will set a new benchmark among small cars.

The lean design strategy has helped minimize weight, which helps maximise performance per unit of energy consumed and delivers high fuel efficiency.

With an all sheet-metal body, it has a strong passenger compartment, with safety.

Features such as crumple zones, intrusion-resistant doors, seat belts, strong seats and Anchorages and the rear tailgate glass bonded to the body.

Markets in order to increase the "perceived value" of its aspirational venture Nano.57.Objectives and issue

We have set aggressive yet achievable objectives for the first, second and third year ofmarket entry. First year objective (July 2009 to December2009) We want to achieve 25,000 units of sales gaining .market share % get from market size Second year objective (JAN 2010 TO DEC 2010)We want to achieve 10% increase in quarterly basis (RM 48,600)Third year objective(JAN 2011 TO DEC 2011)We want to achieve 10% increase in quarterly basis .

57. Award Tata Nano Received:-Ratan Tata received thePadma Vibhushanin 2008 andPadma Bhushanin 2000, the second and third highest civilian honours awarded by theIndia. The other notable awards are:57.1Padma Vibhushan:-ThePadma Vibhushanis the second highestcivilian awardin the Republic of India. It consists of a medal and a citation and is awarded by thePresident of India. It was established on 2 January 1954. It ranks behind theBharat Ratanand comes before the Padma BhushanandPadma Shri. It is awarded to recognize exceptional and distinguished service to the nation in any field, including government service. The first recipients of this award wereSatyendra Nath BoseNand Lal Bose,Zakir Husain,Balasaheb Gangadhar Kher,Jig me Dorji Wangchuk, andV. K. Krishna Menonin the year 1954.

57.2Padma Bhushan:-ThePadma Bhushanis the third highestcivilian awardin the Republic of India, after theBharatRatnaand thePadma Vibhushan, but comes before thePadma Sheri. It is announced on the occasion ofRepublic Dayevery year. It is conferred by thePresident of Indiaat a function held atRashtrapati BhavansometimearoundMarch/April59.SWOT ANALYSIS:-S:-StrengthsW:-WeaknessesO:-OpportunitiesT:-Threats59.1Strengths:- (Brand name TATA, Cost price low, Fuel efficient, Safe)Price itself was a major strength factor for the mini magical vehicle which created a sensation all over the world. Even US president Obama was all praises for the Nano during his Indian visit, an appreciation which soon spread across the world. The five seater car Nano from Tata finally arrived in the market. The strengths of the product included its small size, ease in handling and good mileage efficiency. It directly took on the motorcycle market and tried to attach a status symbol to itself such that customers prefer the Nano above buying a motorcycle. Thus they get a four wheeler instead of a two wheeler. However, sales did not happen as expected and Tata Nano lagged behind.59.2Weakness:-

Low power not a status symbol Delay in manufacturing limited features. The launch price came in two variants ranging between 1.2 lac to 1.5lacs. It was 20% 50% higher than the proposed rates which was a major setback to customers. Within a few months of initial sales technical problems were found in the product and there were a few reports of Nano catching fire. This further weakened the trust for the brand Nano as a whole. Tata also faced political problems and had to shift the plant location which led to production delays. And now due to inflation, Nanos prices have further increased due to increase in the prices of raw material such as steel, rubber and others.

59.3Opportunities:-

Large market forselling, Awareness in the market, First car in lowrange can hit in global market. Though Nano is considered to be a boon for middle class people, it is most often bought by the people who already own one or two cars!! Nano is considered to be a vehicle of convenience to drive in metro traffic. Nano 2012 is a new ray of hope in increasing number of sales and making many satisfied customers. The increase in buying power of the younger generation is a major factor for Indias automobile growth. Tata Nano diesel priced at 3.5lacs has already created a hype among its customers as Tata is known for its diesel products with high mileage efficiency like Indica and Indigo CS Even Rata Tata has admitted that they were wrong in the positioning of the Nano and that the initial marketing effort was poor. Instead Nano should have been marketed as a utility car rather than a cheap car. Many manufactures are still striving hard to compete with Nano, even they will have many drawbacks and failures and it should be a better product than Nano. Certainly revolutions arent usually neat and tidy to start with hence Nano too is a revolution in Indian Automobile history.

59.4THREATS:-

Not sure to hit in rural and semi-urban areas. After the launch