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Tata nano case

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Introduction to Marketing:
The word strategy has derived from Greek word ‘strategos’ which means a general. The term was first tossed in military science where it literally means the art and science of directing military forces in a war or battle. Today the term strategy is used in business to describe how Marketing strategy is defined by David Aaker as a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contributes to the goals of the company and its marketing objectives Levels of Strategy:

Strategy may operate at different levels of an organization -corporate level, business level, and functional level.

Corporate Level Strategy
Corporate level strategy occupies the highest level of strategic decision-making and covers actions dealing with the objective of the firm, acquisition and allocation of resources and coordination of strategies of various SBUs for optimal performance. Top management of the organization makes such decisions. The nature of strategic decisions tends to be value-oriented, conceptual and less concrete than decisions at the business or functional level.

Strategy Business-level strategy is – applicable in those organizations, which have different businesses-and each business is treated as strategic business unit (SBU). The fundamental concept in SBU is to identify the discrete independent product/market segments served by an organization. Since each product/market segment has a distinct environment, a SBU is created for each such segment. For example, Reliance Industries Limited operates in textile fabrics, yarns, fibers, and a variety of petrochemical products. For each product group, the nature of market in terms of customers, competition, and marketing channel differs. There-fore, it requires different strategies for its different product groups. Thus, where SBU concept is applied, each SBU sets its own strategies to make the best use of its resources (its strategic advantages) given the environment it faces. At such a level, strategy is a comprehensive plan providing objectives for SBUs, allocation of re-sources among functional areas and coordination between them for making optimal contribution to the achievement of corporate-level objectives. Such strategies operate within the overall strategies of the organization.

The corporate strategy sets the long-term objectives of the firm and the broad constraints and policies within which a SBU operates. The corporate level will help the SBU define its scope of operations and also limit or enhance the SBUs operations by the resources the corporate level assigns to it. There is a difference between corporate-level and business-level strategies. For example, Andrews says that in an organization of any size or diversity, corporate strategy usually applies to the whole enterprise, while business strategy, less comprehensive, defines the choice of product or service and market of individual business within the firm. In other words, business strategy relates to the ‘how’ and corporate strategy to the ‘what’. Corporate strategy defines the business in which a company will compete preferably in a way that focuses resources to convert distinctive competence into competitive advantage.’ Corporate strategy is not the sum total of business strategies of the corporation but it deals with different subject matter. While the corporation is concerned with and has impact on business strategy, the former is concerned with the shape and balancing of growth and renewal rather than in market execution.

Functional-Level Strategy
Functional strategy, as is suggested by the title, relates to a single functional operation and the activities involved therein. Decisions at this level within the organization are often described as tactical. Such decisions are guided and constrained by some overall strategic considerations. Functional strategy deals with relatively restricted plan providing objectives for specific function, allocation of resources among different operations within that functional area and coordi-nation between them for optimal contribution to the achievement of the SBU and corporate-level objectives. Below the functional-level strategy, there may be operations level strategies as each function may be dividend into several sub functions. For example, marketing strategy, a functional strategy, can be subdivided into promotion, sales, distribution, pricing strategies with each sub function strategy contributing to functional strategy.

Developing a marketing strategy
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases.[4] Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy needs to take a long term view, and tools such as customer lifetime value models can be very powerful in helping to simulate the effects of strategy on acquisition, revenue per customer and churn rate. Marketing strategy involves careful scanning of the internal and external environments.[5] Internal environmental factors include the marketing mix and marketing mix modeling, plus performance analysis and strategic constraints.[6]

External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of marketing strategy is often to keep marketing in line with a company’s overarching mission statement. Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan. Marketing Mix Modeling is often used to help determine the optimal marketing budget and how to allocate across the marketing mix to achieve these strategic goals. Moreover, such models can help allocate spend across a portfolio of brands and manage brands to create value.

Types of strategies
Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: Strategies based on market dominance – In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: Leader

According to Shaw, Eric (2012). Marketing Strategy: From the Origin of the Concept to the Development of a Conceptual Framework. Journal of Historical Research in Marketing. , there is a framework for marketing strategies. Market introduction strategies

“At introduction, the marketing strategist has two principle strategies to choose from: penetration or niche” (47). Market growth strategies
“In the early growth stage, the marketing manager may choose from two additional strategic alternatives: segment expansion (Smith, Ansoff) or brand expansion (Borden, Ansoff, Kerin and Peterson, 1978)” (48). Market maturity strategies

“In maturity, sales growth slows, stabilizes and starts to decline. In early maturity, it is common to employ a maintenance strategy (BCG), where the firm maintains or holds a stable marketing mix” (48). Market decline strategies

At some point the decline in sales approaches and then begins to exceed costs. And not just accounting costs, there are hidden costs as well; as Kotler (1965, p. 109) observed: ‘No financial accounting can adequately convey all the hidden costs.’ At some point, with declining sales and rising costs, a harvesting strategy becomes unprofitable and a divesting strategy necessary” (49). Early marketing strategy concepts were:

Borden’s “marketing mix”
“In his classic Harvard Business Review (HBR) article of the marketing mix, Borden (1964) credits James Culliton in 1948 with describing the marketing executive as a ‘decider’ and a ‘mixer of ingredients.’ This led Borden, in the early 1950s, to the insight that what this mixer of ingredients was deciding upon was a ‘marketing mix'” (34). Smith’s “differentiation and segmentation strategies”

“In product differentiation, according to Smith (1956, p. 5), a firm tries ‘bending the will of demand to the will of supply.’ That is, distinguishing or differentiating some aspect(s) of its marketing mix from those of competitors, in a mass market or large segment, where customer preferences are relatively homogeneous (or heterogeneity is ignored, Hunt, 2011, p. 80), in an attempt to shift its aggregate demand curve to the left (greater quantity sold for a given price) and make it more inelastic (less amenable to substitutes). With segmentation, a firm recognizes that it faces multiple demand curves, because customer preferences are heterogeneous, and focuses on serving one or more specific target segments within the overall market” (35). Dean’s “skimming and penetration strategies”

“With skimming, a firm introduces a product with a high price and after milking the least price sensitive segment, gradually reduces price, in a stepwise fashion, tapping effective demand at each price level. With penetration pricing a firm continues its initial low price from introduction to rapidly capture sales and market share, but with lower profit margins than skimming” (37). Forrester’s “product life cycle (PLC)”

“The PLC does not offer marketing strategies, per se; rather it provides an overarching framework from which to choose among various strategic alternatives” (38). There are also corporate strategy concepts like:

Andrews’ “SWOT analysis”
“Although widely used in marketing strategy, SWOT (also known as TOWS) Analysis originated in corporate strategy. The SWOT concept, if not the acronym, is the work of Kenneth R. Andrews who is credited with writing the text portion of the classic: Business Policy: Text and Cases (Learned et al., 1965)” (41). Ansoff’s “growth strategies”

“The most well-known, and least often attributed, aspect of Igor Ansoff’s Growth Strategies in the marketing literature is the term ‘product-market.’ The product-market concept results from Ansoff juxtaposing new and existing products with new and existing markets in a two by two matrix” (41-42). Porter’s “generic strategies”

Porter generic strategies – strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow. ** Product differentiation ** Cost leadership ** Market segmentation * Innovation strategies — This deals with the firm’s rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types: ** Pioneers ** Close followers ** Late followers * Growth strategies — In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers: Horizontal integration

Vertical integration
These ways of growth are termed as organic growth. Horizontal growth is whereby a firm grows towards acquiring other businesses that are in the same line of business for example a clothing retail outlet acquiring a food
outlet. The two are in the retail establishments and their integration lead to expansion. Vertical integration can be forward or backward. Forward integration is whereby a firm grows towards its customers for example a food manufacturing firm acquiring a food outlet. Backward integration is whereby a firm grows towards its source of supply for example a food outlet acquiring a food manufacturing outlet. A more detailed scheme uses the categoriesMiles, Raymond (2003). Organizational Strategy, Structure, and Process. Stanford: Stanford University Press. ISBN 0-8047-4840-3. : Prospector

Marketing warfare strategies – This scheme draws parallels between marketing strategies and military strategies. BCG’s “growth-share portfolio matrix” “Based on his work with experience curves (that also provides the rationale for Porter’s low cost leadership strategy), the growth-share matrix was originally created by Bruce D. Henderson, CEO of the Boston Consulting Group (BCG) in 1968 (according to BCG history). Throughout the 1970s, Henderson expanded upon the concept in a series of short (one to three page) articles in the BCG newsletter titled Perspectives (Henderson, 1970, 1972, 1973, 1976a, b). Tremendously popular among large multi-product firms, the BCG portfolio matrix was popularized in the marketing literature by Day (1977)” (45).

Strategic models
Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization’s strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy. Marketing Mix Modeling is often used to simulate different strategic flexing go the 4Ps. Customer lifetime value models can help simulate long term effects of changing the 4Ps, e.g.; visualize the multi-year impact on acquisition, churn rate, and profitability of changes to pricing. However, 4Ps have been expanded to 7 or 8Ps to address the different nature of services. There are many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered around Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for “Growth Opportunities” in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges.The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps. Real-life marketing

Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. Thus, for example, many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by ‘gut-reaction’, to ensure that it is reasonable. For most of their time, marketing managers use intuition and experience to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be ‘flying by the seat of the pants’, or ‘gut-reaction’; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed. This, almost instinctive management, is what is sometimes called ‘coarse marketing’; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists.

Tata Motors
Tata Motors Limited formerly is an
Indian multinational automotive manufacturing company headquartered in Mumbai, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans and coaches. It is the world’s eighteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume. Tata Motors has auto manufacturing and assembly plants in:

1) Jamshedpur
2) Pantnagar
3) Lucknow
4) Sanand
5) Dharwad
6) Pune
India, as well as in Argentina, South Africa, Thailand and the United Kingdom. Tata Motors has produced and sold over 6.5 million vehicles in India since 1954. Originally a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. In 2010, Tata Motors surpassed Reliance to win the coveted title of ‘India’s most valuable brand’ in an annual survey conducted by Brand Finance and The Economic Times. Tata Motors was ranked as India’s 3rd Most Reputed Car manufacturer in the Reputation Benchmark Study – Auto (Cars) Sector, launched in April 2012. Tata Motors has been ranked 314th in the Fortune Global 500 rankings of the world’s biggest corporations for the year 2012. Tata Motors is a cross-listed company; Its stock trades on the Bombay Stock Exchange and the New York Stock Exchange as TTM.

The second-generation Tata Indica Vista ; one of the best selling cars in the history of the Indian automobile industry

Tata entered the commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz of Germany. After years of dominating the commercial vehicle market in India.

Tata Motors entered the passenger vehicle market in 1991 by launching
the Tata Sierra, a multi utility vehicle.

After the launch of three more vehicles, Tata Estate (1992, a stationwagon design based on the earlier ‘TataMobile’ (1989), a light commercial vehicle), Tata Sumo (LCV, 1994) and Tata Safari (1998, India’s first sports utility vehicle). Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although initially criticised by auto-analysts, its excellent fuel economy, powerful engine and an aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favorite.

Tata Motors also successfully exported large quantities of the car to South Africa. The success of Indica played a key role in the growth of Tata Motors. In 2004 Tata Motors acquired Daewoo’s South Korea-based truck manufacturing unit, Daewoo Commercial Vehicles Company, later renamed Tata Daewoo. In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach manufacturer Hispano Carrocera. Tata Motors continued its market area expansion through the introduction of new products such as buses (Starbus & Globus, jointly developed with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with subsidiary Tata Daewoo). In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus, to manufacture fully built buses and coaches.

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover, manufacturer of the Jaguar, Land Rover and Daimler luxury car brands, from Ford Motor Company. In May 2009 Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo. Debuting in South Korea, South Africa, the SAARC countries and the Middle-East by the end of 2009. Tata acquired full ownership of Hispano Carrocera in 2009. In 2010, Tata Motors acquired an 80% stake in the Italy-based design and engineering company Trilix for a consideration of €1.85 million. The acquisition formed part of the company’s plan to enhance its styling and design capabilities. In 2012, Tata Motors announced it will invest around Rs 600 crore on developing Futuristic
Infantry Combat Vehicles in colloboration with DRDO.


Tata Motors has vehicle assembly operations in India, the United Kingdom, South Korea, Thailand, Spain and South Africa. It plans to establish plants in Turkey, Indonesia and Eastern Europe.Tata Motors’ principal subsidiaries include Jaguar Land Rover, Tata Daewoo and Tata Hispano. Tata Motors is among the top three in passenger vehicles in India with products in the compact, midsize car and utility vehicle segments. The company’s manufacturing base in India is spread across: Jamshedpur (Jharkhand)

Pune (Maharashtra)
Lucknow (Uttar Pradesh)
Pantnagar (Uttarakhand)
Dharwad (Karnataka).

The company is establishing a new plant at Sanand (Gujarat). Tata’s dealership, sales, service and spare parts network comprises over 3500 touch points.

Tata also has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal .Tata has dealerships in 26 countries across 4 continents. Though Tata is present in many countries it has only managed to create a large consumer base in the Indian Subcontinent, namely India, Bangladesh, Bhutan, Sri Lanka and Nepal. Tata has a growing consumer base in Italy, Spain and South Africa. Tata Motors has more than 250 dealerships in more than 195 cities across 27 states and 4 Union Territories of India. It has the 3rd largest Sales and Service Network after Maruti Suzuki and Hyundai. Tata Daewoo . In 2004, Tata Motors acquired Daewoo Commercial Vehicle Company of South Korea. : To expand the product portfolio Tata Motors recently introduced the 25MT GVW Tata Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage on the strong presence of TDCV in the heavy-tonnage range and introduce products in India at an appropriate time. This was mainly to cater to the international market and also to cater to the domestic market where a major improvement in the Road infrastructure was done through the National Highway Development Project. Tata Daewoo is the second-largest heavy commercial vehicle manufacturer in South Korea. Tata Motors has jointly worked with Tata Daewoo to develop trucks such as Novus and World Truck and buses including GloBus and StarBus. In 2012, Tata will start developing a new line to manufacture competitive and fuel efficient commercial vehicles to face the competition posed by the entry of international brands like Mercedes-Benz, Volvo and Navistar into the Indian market.

1. Tata Starbus Low Floor 1610
2. Tata Marcopolo buses in the Delhi BRT
3. Commercial vehicles
4. Military vehicles
5. Electric vehicles

Business Plan for Tata Nano

TATA Nano is the cheapest car in the world. It is manufactured by TATA Motor Limited, the largest automobile company in India. Its chairman, Mr. Ratan Tata en visions that Tata Nano to become a “People’s car” which is affordable by almost everybody. Tata Nano is scheduled to first be launched in India on 1st April 2009 and expected to be in Indian market by July 2009. From the first moment that Tata Nano project was published, a huge buzz has been created all over India. It has already received 3000 bookings.

What makes Tata Nano so cheap? Basically, by making things smaller, lighter, do away with superficial parts and change the materials wherever possible without compromising the safety and environmental compliance. It is said that Tata Nano has better millage than Toyota Prius and same gas emission as a scooter.

Tata Nano will be manufactured totally in India. It will be assembled in its two factories at Pantnagar and at Uttarakhand and, also, a mother plant has been proposed for Sanand Gujarat. Regarding the distribution of the car, we have called it “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 through ancillary services.

There will be three types of Tata Nano car available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. The selling price of the three models will be 2,185 Euro (Rs. 153,000), 2,585 Euro (Rs. 181,000) and 2,985 Euro (Rs. 209,000) per unit, respectively. Our financial projection for Year 1 is a net loss after taxes of 637,000 Euro. It is estimated that gross profit for the second year would yield 880,000 Euro and the third year 1,097,000 Euro. Estimated monthly instalment payment is 10,000 Euro for five years period. With this price, the target market is very wide which includes those with income 30 Euro (RS. 2,000) per month, students, female, workers and scooters’ riders .

The 3 million Euro we are seeking will be used to begin production, marketing, and for short term capital and overhead needs.


The Tata Nano is a rear-engine, 3 meters long, four-passenger city car built by Tata Motors, aimed primarily at the Indian market. The car is very fuel efficient, achieving around 26 kilometers per liter on the highway and around 22 kilometers per liter in the city. The car has a price tag of just Rs 1 lakh the same price as the DVD player in a Lexus. Hence making it easily affordable for a middle class family. Tata Nano is a dream come true for an average Indian. Now the medium class people can also have and enjoy the ride of four wheeler. The car has achieved its low price by minimizing cost on unnecessary ‘luxuries’, the basic Nano comes without front and rear fog lights, without a heater or air conditioning, without anti-lock brakes, only one single windscreen wiper, manually operated windows, manual steering with no air bags, tiny 12” wheels, plastic body parts joined with adhesive instead of more conventional metal and welding.

In addition, Tata has come up with practical ways to reduce car weight and thereby trim down the overall cost. It uses comparatively small and light engine, a 623cc two-cylinder petrol engine made of aluminum, unlike conventional engines which are made out of cast iron. The engine of Tata Nano is strategically placed at the back of the car leaving the front section for luggage, that too with the capacity of a briefcase. This is the most significant element in bringing down the weight and the overall cost of the car. Other factors that contribute towards the weight reduction are the usage of hollow steering wheel shafts, plastic body panels and smaller tubeless tires. As a result of these measures, Tata Nano weighs only about 590kg. Lesser weight and fewer parts mean less raw material and lower cost for Tata Nano. The manufacturers of the TATA Nano Car are aiming to provide an affordable mode of transport to their initial target market of lower income families in India.

The Organization and Management Team

The management team for Tata Nano is a diverse group with strong skills in technology, marketing and sales, finance and operations. Our primary criteria when filling these executive positions was extraordinary past achievement.

Key Players

John Smith – CEO

Mr. Smith brings more than 25 years of marketing and executive management expertise in growing businesses at leading companies. Immediately prior to Tata Nano Mr. Smith was CEO of New One Corporation. While there he led the worldwide widget marketing group, a multibillion dollar enterprise that is currently ranked first in its industry. Mr. Smith also successfully reorganized the company, streamlining operations and improving profitability. Mr. Smith had previously spent seven years at Future, Inc. as COO. He was responsible for the development and launch of numerous successful products in growing markets and new business categories for Future. He helped drive revenues from more than $3 billion to more than $12 billion. Under his guidance, the company was named the most-respected brand names in America in 1996 and 1997. He holds both a Bachelor of Science in Industrial Engineering and a Bachelor of Science in Management from North-western.

Fred Stone – COO

Fred Stone was brought in a COO in January 2008. As COO, Mr. Stone’s mission is to establish Tata Nano’s leadership in the worldwide market. Mr. Stone was most recently senior vice president of the global customer service organization at Gravel, Inc. His responsibilities included customer service for all of Gravel’s Large Boulder Operations. Prior to his worldwide service role, Mr. Stone was responsible for Gravel’s worldwide Enterprise Sales and Service organization.

Mr. Stone has held a variety of sales and marketing management positions at including vice president of Gravel’s North America System Sales, vice president and general manager for Gravel’s boulder networking product group, and a director of marketing with responsibility for key gravel product lines.

Mr. Stone holds an MBA from the University of North Carolina at Chapel Hill and a degree in Business, with honors, from Michigan State University.

Bob White – VP of Product Development

Bob White was named to the Tata Nano, Inc. executive team in August 2007, as VP of Business Development. A 13-year veteran of SIMs Corporation, Mr. White was most recently chief software engineer with SIMs’ global development team. Prior to his worldwide development role, Mr. White was responsible for SIMs’ worldwide business development group. He has held a variety of engineering management positions other Fortune 500 companies, including vice president of development at North America Car Sales with responsibility for key network communication product lines.

Mr. White do holds an MBA from the University of California at Berkeley and a degree in Business, with honors, from San Jose State University.

Kate Brown –VP of Marketing

Kate Brown is Tata Nano’s VP of Marketing. She joined after nine years at OFFON, Inc., where she served most recently as Senior Marketing Director. At OFFON, she was responsible for creating new strategic partnerships and also for creating a brand awareness for a $500 million joint venture between Act, 1business, and others. Previously, she served as Vice President at JKL, managing regional business development, marketing and sales teams. Brown also did marketing and consulting for BBB and DDE consulting.

Brown holds an MBA degree from the Duke University.

Johan Bill – VP of Finance

Johan Bill joined Tata Nano, Inc. as Vice President of Finance in September 2008. He manages the company’s finances and has established the financial systems. He worked with his former employer, Wings, for over 12 years, holding numerous executive finance management positions as Wings grew from a $200 million to a $2 billion company. Most recently working as Controller of Wings, he was an integral player in executing and integrating numerous acquisitions. He also spearheaded the development of the cash management and capital infrastructure, and streamlined the financial planning process which led to significant improvements in the internal systems architecture.

Mr. Bill has a diverse financial background, with experience at both start-up and large corporations. He graduated Summa Cum Laude from Berkley with a degree in Accounting. He also holds an MBA from Santa Clara University. The relationship between the Board, the Committees and the senior management functions is illustrated below:

The way Tata Nano raise funds include several aspects. Those aspects are detailed in the as follows:

Selling the cars to clients: This activity is the first revenue flow of the project. The first targeted market is the Indian one.

The cars deliveries have started in July 2009. There are also project to extend the market to Malaysia, the rest of Asia, Europe, Africa and south America, starting in 2011. Bank Services Tata Nano have sign contract with Indian Banks in order to allow low income people to get loans at low interests. Therefore, they could afford booking for their Tata Nano. In that contract, Tata Nano and the bank all take advantages.

Maintenance Services
The Tata Nano project include a maintenance department. In fact, the customers will be offered maintenance services at a fix price per month. Those services will be extremely competitive and cheap as the car itself.

Tata nano have been making a lot of advertisement in a lot of countries. As Tata Nano have become a famous trade, some channel will allow Tata Nano advertisement to be displayed, increasing the channel audience. In addition, Tata Motors will take advantage of sweepstakes organized in order to promote the car. Those events always bring to the company both publicity and money.

There are a lot of product that have been manufactured in order to promote the Tata Nano, namely hats and cups. The company will therefore sell those product and make money benefits from them.
Making franchises  The development of Tata Nano started 6 years ago and have lead to the production of an extremely efficient car as far as pollution and gas consumption are concerned . The technology used could be sold to other companies as Licenses, leading to funds raise.

Distributors In addition, Tata Nano have planned to use Distributors to make its product easily available to the Indian population. Therefore those distributors will pay royalties to Tata Nano after selling each car.

9 TATA Nano
The Market
Tata Nano’s launch could expand the Indian car market by 65%, according to rating agency CRISIL. The low price makes the car affordable for families with incomes of 1,500 Euro (Rs. 100,000) per annum, the agency said. The increase in the market is expected to push up car sales by 20% over the previous year. “The unveiling of Tata Nano, the cheapest car in the world, triggers an important event in the car market. Based on the statement by company officials, CRISIL Research estimates the consumer price of the car at around 1,900 Euro (Rs. 130,000). This brings down the cost of ownership of an entry level car in India by 30%. The Indian mass who has dreamt of buying a car can enjoy the launch as it is now affordable to most middle class families. According to a rough estimate the average income of middle class has gone up in recent years. Currently the Indian economy is expanding at the rate of 9% which is second fastest growing economy in the world after china and per capita income has increase two fold in past 10 years.. This has perhaps left more disposable income in the hands of Indian consumers. The banks providing various types of loans and credit facilities are also a major reason for consumerism. So the launch is, overall beneficial for Indian consumers and the economy.

Keeping in mind that the Tata Nano was envisioned as the four wheelers for those who can only afford two wheelers, due to its affordable price Nano’s impact on two wheelers sales has been widely debated, Nano will also affect sales of higher priced Cars or will motivate competitors to reduce the prices resulting lowered margins for rest of the industry. As the Nano was conceived and designed around introducing the automobile to a sector of the population who are currently using eco-friendly bicycles and motorcycles, environmentalists are concerned that its extraordinarily low price might lead to mass motorization in countries like India and therefore possibly aggravate pollution as well as increase the demand for oil. The ecology focused German newspaper Die Tageszeitung feels that such concerns are “inappropriate” as the Tata Nano has lower emissions compared to the average Volkswagen, and that developing countries shouldn’t be denied the right to motorized mobility when industrialized countries should be looking to reduce their emissions and usage of cars. Die Walts reports that the car conforms with environmental protection, and will have the lowest emissions in India.

TATA Nano 10
The closest competitor of the upcoming “Nano Car” is Maruti 800 which is double of its price. a small car from Maruti Suzuki, which is priced higher than Tata Nano. Despite six percent shorter, Tata nano has about twenty one
percent more interior space than the Maruti 800 due to its larger height and width. Suzuki is aware of the gap and is working arduously to improve its current care lineup. It will focus on achieving the practicality and efficiency of Tata Nano without compromising on safety and quality. However, Maruti Suzuki is not in a position to reduce the price of Maruti 800 just for the sake of competing with Tata Nano. Bajaj auto is also developing a low cost car (code-named ULC) tagged at 2,000 Euro together with Renault-Nissan to rival Tata Nano. This ultra-low cost car is expected to be launched in India in 2012. The companies claim that the new ULC car will consume less fuel than any other four-wheeler on the urban roads. Thus the car is expected to take on the Tata Nano, the cheapest car being produced and marketed by Tata Motors in the country.

The Toyota IQ could be a competitor of TATA Nano at international level because it is the world’s smallest four seater car. Though the car is a small car since it gives the feel of a large car since it has the power of a Toyota. But the Nano’s price and design is much better than the Toyota IQ.

Another car that could be a competitor will be Mitsubishi I. But there again people may opt for the nano because of the mileage it provides if people are looking for a fuel efficient car in that category. The toyota aygo super mini could also compete with this car. China’s Cherry QQ could also be considered as a strong competitor who is expected to gain foothold in the Indian market in 2008. The Cherry is expected to retail about 2,600 Euro. But when compared to any of these above mentioned international models the Tata Nano europa model stands out.

Hyundai is another company taking Tata Nano seriously. Hyundai plans to launch a new model in the market which would be priced cheaper than their current cheapest model- Santro. This 11 TATA Nano

new car would not be released at least until 2011, and is expected to be manufactured in Hyundai’s new factory.
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, Oreva Super (both reportedly even cheaper than Tata Nano) and REVA pose even more significant danger to Nano. The design, mileage, space efficiency, maneuverability of the tata nano europa is better when compared to the others. Also in terms of being less pollutive the tata nano europa is a very environment friendly car. May be it could be found a bit lacking in power and the top speed. But tata nano europa is set to take entire europe and the rest of the world by storm and is sure to give its competitors a run for their money.

Key Benefits to the Customers
Tato Nano is priced around 1 Lakh rupees or 2, 000 Euro. This price tag is almost half the price of the current cheapest car in India , Maruti Suzuki 800, which is priced around 2 Lakhs. Tata Nano is ideal for two-wheeler owners looking forward to switch to 4 wheelers. Its also suitable for women, who would find driving a car safer than driving a scooter. FUEL EFFICIENT

Tata Nano has a mileage of 21.97 kilometer per liter, under city road conditions, and 25.97 km/L on highways. This makes Tata Nano a fuel efficient vehicle, which will save money in the long-term. This mileage comes with a powerful engine of 623 cc with a maximum speed of 105 Kilometers per hour

Tata nano has gone through the full frontal crash test according to the standard norms. Although it is 8% smaller than Maruti 800 (the current cheapest car in India), its 21% more spacious. It is a 5-seater, with an ability to carry heavy loads. According to Autocar India, though Tata Nano weighs a mere 600 kg, its robust and well-screwed together.

If you think Tata Nano would increase pollution, think again. Tata Nano emits less carbon than two-wheelers. It also meets emission norms of BS II, III,
IV which are Euro II, II, IV equivalent. TATA Nano 12

Tata Nano is much better than most of the other transport ways. In comparison to taxis in india it is much cheaper and good at looks. In comparison to rickshaw it is comfortable. It’s also better with environment and speed if we compare to rickshaw. It’s also cheaper in comparison to rickshaw. Saves lot of energy which with taxis and rickshaws is completely wasted.In comparison to rickshaw at least NANO will protect in rains.

13 TATA Nano
The Marketing Plan
The Marketing Strategy:
This section discusses the different aspects of the marketing strategy adapted by TATA for their NANO car.

The People’s car:
Well before the car is launched, TATA-NANO was already with the people of India by its logo called “the people’s car”. This is how it all started, the advertisement for the people of India : Can one buy a car with 1-lakh rupees, yes we can in couple of years. This advertisement made a huge impression on the automobile market, as almost the whole middle class of India started dreaming of their own car. This should be considered in the view that in India, the average car price was 3 to 4 times greater than what Tata offered. Also the fact that rupees 100 K was affordable compared to 300 K or 400 K rupees. This soon became a discussion point in India. So instead of providing the advertisement at the launch of new idea or product, nano was the lucky to get the free publicity thanks to the hype that was created by the first move made by TATA.

The Buzz
As stated above, once it became “the discussion point” in a country of population of 1 billion, TATA has no worries of marketing for some time. The TV channels, the automobile industry experts, the investors, the people … who not; every one discussing “Is it really possible”. This first advertisement was a huge success, and it perhaps decreased the marketing cost of TATA. In fact, people started asking the question, “when can we buy the car”. The buzz in the market, “tata nano”

Auto Exposition 2007
The first introduction of the nano with the public was made in the auto exposition in2007 in home country in Delhi. There had been discussion in the market that, “Is it really possible”. The answer was the display of the prototype of the car. Now this at once ended few of the rumors in the market; and the attention was switched to technical details of the car. So the exposition proved to be the first grand success point in the marketing of the nano car, if the first advertisement is considered as the buzz. The situation turned out, “Yes, it is possible”.

TATA Nano 14
Across the borders
It was the time to show the world, that not only the high-tech cars are the best sellers in the market but there are people who are looking for the cheapest car on earth by a big margin. The car was in 78-th Geneva Motor Show 2008. This helped to make the image of car as a good working replacement to the existing ones back home in India. The participation in the Motor shows was widely discussed inside and outside India helping the TATA experts to better understand, where did they stand to the world’s expectation and what are the things to be done. This also changed the face of the Indian automobile industry in the world, and now people were amazed with the fact sheet of the NANO car.

Tata Motor Showrooms
The nation wide motorshows were organized by TATA to bring the whole class of society to the shows that they have never attended in their lives rather most of them never thought of going to such a show. The car became a need as compared to a luxury before.

On The web
Considering the needs of the 21st century, the website was launched in the beginning. The website is quite comprehensive yet it provides all the answers to the questions being asked since the start of the project. The marketing team has also put a good effort to keep the website simple and easy to use and understand, it was really a vital requirement considering the intended users / buyers of the product. Just to make a point, that how necessary and successful the website and the car itself are “more than 50 Million hits in the first year”. Now one can find the nano on facebook, orkut and twitter.

The One Form Booking
TATA has been successful in this important aspect of the selling by the virtue of some good marketing of the booking of the car. Since there are millions of the interested buyers of the product, a transparent and easy booking procedure was required to keep the faith of customers in TATA. The hype is so much that TATA can’t provide the demand for the next many years, so the booking process became a focal discussion point in the market. TATA chose the Internet booking as well as the booking by the agents. In any case, the intended buyer is to fill one single form. The lucky buyers are chosen by a random draw, so NANO is popular, isn’t it.

15 TATA Nano
Bank Financing
TATA is keeping its promise of “people’s car” by providing bank car financing. Despite the fact that NANO has more customers than the production line can produce in next few years at the moment, NANO decided to make the way for the people who can’t afford to pay the price with the booking of the car. The 15 major banks including the state bank of India have been signed with the TATA to finance the low income people. Now how much one has to pay for booking a car, its beyond your imagination … hold your seat, its 3000 Indian Rupees that makes around 50 Euros …. Not kidding. Now how does this come into the marketing strategy of the NANO, in fact TATA has closed the doors for any competitor by not letting go any one in the India who dreams of a personal car and can’t get it. The customer loyalty is to grow with such moves, specially when TATA has so many buyers at the moment.

Key Marketing Features
Apart from the buzz, the financing issue etc. there has been some more serious work as well. The TATA is advertising some of the features of the NANO that make it comfortable, usable and not only affordable. Some of the features are discussed here: The low maintenance is a key issue, one can buy a car or get bank finance but One has to maintain the car by oneself in a country where insurances are high. The low maintenance makes NANO an automatic choice for the ones who even normally travel on motorcycles. The small size of the car gives a big advantage of parking in the urban India, where its getting hard to find the places round the clock.

NANO is not only cheap, its so cheap when it comes to the fuel consumption. The fuel consumption is far better than the 1000 cc cars which are normally used by the low income Indians.

The NANO is environmental friendly as well, and fulfills all the requirements of the international and national laws.

The Cheapest is the tag that one can’t take from NANO for few coming years. The stylish, the car doesn’t look like a rickshaw (a local transport), its not that far away from the stylish 100 times expensive cars.

The wide color range provides the choice a colorful India needs, without this forget about selling much.

TATA Nano 16
“A promise is a promise”
Here we go; the car was finally launched in the market with the said logo. The promise has been made. The launch is nationwide, so NANO will be seen throughout the country, and will find itself in 1.2 Billion people.

TATA is providing a 18 months Or 24 K Kilometers warranty, it can’t be considered as very good compared to what one gets at the international level but it is still not bad and it sounds good once it is considered in a global package of price, use, fuel consumption etc etc. The NANO brand

Nano has itself become a brand now, and one can find the nano phone, nano watch. The products are available on and offline. These products have of course added to the popularization of already well known Nano.

The future
Nano will not be limited to India, the international marketing has started. The advertisements for Malaysia are already underway and an early launch is expected while the NANO Europa launch is expected in 2012.

17 TATA Nano
The Manufacturing Plan
Development began in: 2003
Scheduled to roll out in: 2008
To achieve its design goals, Tata refined the manufacturing process, emphasized innovation and sought new design approaches from suppliers. Many components of the Nano are made in Germany by Bosch, such as Fuel Injection, brake system, Value Motronic ECU, ABS and other technologies.

The Nano was originally to have been manufactured at a new factory in: Singur (census town, less than 5000 people, 75% working men on non-agricultures, and 400km2/citizen),
West Bengal (state in eastern of India, with 3rd fastest growing economy in India, best power infrastructure, includes Kolkata city),  but increasingly violent protests forced Tata to pull out October 2008. Currently, Tata Motors is reportedly manufacturing Nano at its existing plant in:  Pantnagar (town and university campus)  Uttarakhand (state in northen of india, policies for generous tax benefits for investors) and a mother plant has been proposed for:
Sanand Gujarat (largest business in india, 1st nationwide gas-based thermal electricity)  The company will bank on existing dealer network for Nano initially. The new Nano Plant could have a capacity of 500,000 units, compared to 300,000 for Singur. Gujarat has also agreed to match all the incentives offered by West Bengal government.

Cost cutting features

• The Nano’s trunk does not open. Instead, the rear seats can be folded down to access. • It has a single windscreen wiper instead of the usual pair. • It has no power steering.
• It has no ABS.
• In Base model it has three lug nuts on the wheels instead of four. • It has only one side view mirror.
TATA Nano 18
• It has 12″ wheels.
• Plastic body parts joined with glue rather than welding. • A two-cylinder 623 c.c. engine.
Tata initially targeted the vehicle as “the least expensive production car in the world”— aiming for a starting price of 100,000 rupees or approximately US$2000 (using exchange rate as of 22 March 2009)

6 years ago,

despite rapidly rising material prices at the time.
As of August 2008, material costs had risen from 13% to 23% over the car’s development, and Tata faced

the choice of:
• introducing the car with an artificially low price through government subsidies and taxbreaks.

• forgoing profit on the car.
• using vertical-integration to artificially boost profits on cars at the expense of their materials industries

• partially using inexpensive polymers or biodegradable plastics instead of a full metalbody raising the price of the car.

19 TATA Nano
The Financial Plan
Investment funding is needed for capital expenses and operating expenses as can be observed by the following financial statements:

Tata Nano achieves what most people deemed impossible through originality and ingenuity. It is a no frills car that serves the needs of the general public and India’s deplorable road conditions and notorious traffic. In this sense, the production and launch of Tata Nano can be called a revolution – not only to the consumers but also to industry players. Other players are contemplating on their own versions of low cost alternatives as a result of the overwhelming response from the Indian public and all over the world. Moreover, their skepticism is met with a surprise upon seeing the model in action. The next step forward for Tata is to address the possible concerns with regard to ownership in order for customers to grasp the value proposition that Tata is trying to propagate. This includes dispelling all perceptions of shortcomings normally associated with a low-cost car through vigorous testing on real roads using real users. The basic rule of customer service still applies. Tata Nano should meet the consumer’s expectations by providing a reliable and modestly safe vehicle to drive. The car, with its immense recognition gained even before its launch, is expected to fulfill the dreams of common people.

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