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How marketing can cause a product to fail? [Tata Nano Case Study]

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I have discussed in the past many good examples of marketing helped a product to succeed. Apple is the first brand that comes to mind when we talk about marketing. The communication and design of the products has led to its wide spread success and Apple becoming one of the most valuable companies in the world.

But what about marketing failures? For every Apple there are many products that fail due to bad marketing strategies. In this piece I would like to discuss one of them- The TATA Nano.

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In a recent trip to Sri Lanka, I saw the TATA Nano being used extensively as a Taxi. As I asked around the average Sri Lankan felt that the Nano though a good car did not carry enough prestige to be a passenger car. And this they felt was a result of the positioning taken by the marketing managers of the brand.

As I look back at the previous campaigns for the Nano, it suddenly struck me that Nano was a consumer behavior assessment failure. The brand managers positioned the car as the next upgrade for a family of four with a two wheeler. But every such household had an aspiration to move to something better and not necessarily cheaper. Even if the consumer was in that income bracket, he aspired for something cooler.

This point was not taken into consideration while the brand managers were coming up with the positioning.

The next campaign focused on the tier 2 cities with bad roads and little or no inclination to move things along. This further hit the car sales.

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Finally now the Nano has been positioned as a cool car to have fun with. Also the colors and the powerful AC are being positioned as the differentiators along with the classic adage of better fuel efficiency that has helped its sales.

I personally feel that positioning a product or service would be a strong spin off from consumer behavior and without understanding the hopes and aspirations of the masses a product is bound to not have the stickiness factor.

TATA Nano was a classic case of a product manager who chooses not to respect the aspirations of his prospective consumers. A famous marketer once told me that “A man buys a car for what he wants to be and buys a house based on what he is”.

In such a case the positioning was totally wrong.

So what could have been done to position the car better?

1.) A dual positioning strategy one for the smaller cities and the other form the urban areas could have worked.

2.) Focusing on some of the features like maneuverability- the Maruti Suzuki Alto was positioned this way, Mileage- Maruti Zen and Performance – Hyundai Verna

3.) Positioning the brand and not the Car- There could be an initial positioning of the TATA brand rather than the car, till the marketers understood the features sought by the consumers.

4.) Focusing on special segments like Women drivers or college students as the first car- this would have helped the TATA’s create a generation of customers and keep these students in the same family as they grow up.

At the end of the day, it is what the car means to you rather than what it is. I think most marketing folks need a lesson in psychology more than STP.

What’s your take?

"How marketing can cause a product to fail? [Tata Nano Case Study]", 5 out of 5 based on 1 ratings.
  1. Nagendra Naidu says

    In Indian society owning a car is an achievement for just above the bottom of pyramid section…so its a pride… Once you promote a car as a cheapest car in public indirectly Ur insulting people who owns this car… They feel they lose their status by buying this car….!!! Its my opinion after discussing with my friends….!!! Probably Tata forgot the “status/feeling of pride” factor while promoting…!!!

  2. Siddharth Vishwakarma says

    The company didn't position the product instead consumers did and that was the recipe for disaster. Secondly, a car is considered to be a 'class' symbol, and if you ask anyone no one would like to buy a CHEAP CAR even if it's cheap, they won't be liked to call it cheap.

  3. george krishna says

    Whatever the strategy of marketing, Nano is to be promoted; it is the responsibility of every Indian;
    since its absolutely an Indian’s affordable car.I assure Mr. Tata; if he agrees to change the front view to a much better style(its looking ugly)..back is somewhat OK:… no doubt that nano would be the best selling car in India.

  4. jayaram says

    I think I agree with his marketing strategy analysis. The Vision of Mr. Ratan Tata has not been put forwarded by the marketing experts.

  5. sachin pawar says

    Tatas come agin very strongly .i think tata nanos marketing stragies are wrong
    but they understand better now and come back strongly

  6. Altaf Rahman says

    Though internationally JLR is the main bread winner for Tata’s, in India their strategy was different. Affordability to lower middle class is their main aim (Tata want to replace the family bike with his car).
    I always felt Nano is fit to be taxi for common man.
    In smaller towns and villages Tata Ace has been replacing Bajaj autos with 7 seater capacity. I always felt Nano can provide enclosed comfort to city commuters. As the milage is higher, with maneuverability in legendary traffic jams in India, Nano should replace Autos with fringe benefits like a/c.
    4 wheels are always better than 3 wheels.
    Just my two paisa :)

    1. Dr Vikram says

      Hi Altaf

      I agree and that is what the Nano will end up as. But I dont think the Product managers at Nano envisioned that future for the car.

  7. Sandy says

    Hi All,

    I don’t think Tata Nano is a failure. Yes the initial marketing strategy was completely wrong.
    But I believe now they have understood their mistake and are trying their best for a come back.
    It can be clearly seen on social media. They are doing a lot of stuff on social media and claims to be the no.1 auto brand page on FB. Seems they have changed their marketing strategy. https://www.facebook.com/TataNanoPage

    Last but not the least, as an user I am completely satisfied this this car. Tata Nano is my second car, but still I prefer it over my Honda City (my 1st car).

    1. Dr Vikram says

      Hi Sandy

      Good to hear some feedback from a user of Nano. I don’t think it is a failure as yet but it has filed to meet the expectations set by marketing. Of course they are making a comeback and TATA’s will ensure that eventually the car does well but that is not what I am trying to say and its initial launch has failed due to marketing.

  8. fivepoint5 says

    Nano is doing nothing good to Tata, all the sales are coming from JLR

    1. Dr Vikram says

      Yes I agree, it seems JLR is accounting for some 70 % of the revenue and almost 60 % of the profits. I agree Nano does not mean much to them in business sense.

  9. Dr Vikram says

    Hi Jagan

    Totally agree, wish the TATA marketing guys are listening to it..

  10. Dr Vikram says

    Jeetendra

    Interesting two questions

    ” Go check the figures”
    pretty interesting considering Nano has cumulative sales figures of of 1.75 lakh cars for the three years between July 2009 and March 2012 which remains well below the Sanand plant’s annual production capacity of 2.5 lakh cars. The booking sales figures were 2.06 lakh bookings after its commercial launch on March 23, 2009 and it is yet to breach that mark.

    ” Nano is doing well”

    Yes it has to after all the sales promotions thrown in by TATA’s and still has not sold as per the bookings figures. You get 60,000 kms/4 years warranty at no extra cost and a comprehensive extended warranty at 99 rs per KM all to sell the car,

    I suggest do some research on your end and come back and then we can have this discussion.

  11. Dr Vikram says

    Hi Rajesh

    I agree that newness was never exploited fully and there was a constant course correction after that.

  12. Jagan says

    Exactly! my view also the same as author. Im not an car owner/driving expert, but apart from technical, i see the marketing and branding of this product. A product wont be success if it positioned/ branded as “Cheap” by its promoters. The users should spread the word that this product is “cheap” and “affordable”. From the beginning Tata Nano branded as a cheap car, This is also one of the reason.

  13. Jeetendra Lalwani says

    On what basis Tata Nano has been branded as failure. I think so u need to check the facts again. It is doing quite well and has created a role model for a lot of other companies to follow.

  14. Rajesh Radhakrishnan says

    I think, there's a lot of newness quotient while the nano was launched, this newness quotient wasn't exploited enough, this would have raised the position to the prospect of owning something trendy, new and innovative other than just upgrade your two wheeler.

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