Tata Nano launched in India

This is an off-topic post to indulge my passion for a product. The product is Tata Nano. Dubbed ‘the people’s car’ by its manufacturer Tata Motors and its visionary chairman Ratan Tata, Tata Nano was built from ground up with a particular price target - Rs. 100,000. Or just around US$2000 or AU$3000.

Nano is the cheapest car in the world and has half the price-tag of Maruti 800, also a people’s car and the cheapest car until now. Incidentally, Maruti 800 was my first car when I was living in India. I bought it in 2000 and it is still faithfully serving my brother back in Delhi. Although I have no love lost for ‘the 800′, Tata Nano ups the ante.

It has received rave reviews from auto experts who claim that it is not a ‘non-car’ as its critics claimed. It’s not a motorcycle encased in a car body, nor an auto-rickshaw with the body fo a car. It’s a full car with all the features you expect in a car. And that includes safety and environment compliance.

You can read all about Tata Nano on their official site. Ratan Tata’s blog.

So, what’s my special connection with Nano? Well, I don’t own it. At least not now. It’s right now in the booking stage anyway and even if I somehow prod my brother in India to buy it, I would hardly get to drive it -  a few weeks when I go there on vacation.

My special connection with Tata Nano is a marketing plan that I wrote as part of my Marketing management subject at MGSM that I did as part of my continuing education. First, I had to convince two other group members to consider this product for writing a marketing plan on. With these gentlemen on board, we conducted market research, did a market and competitive analysis followed by positioning, target market, marketing programmes and even projected financial statements, all the usual planning stuff in more than 50 pages.

While we were sceptical of its feasibility in Australia, we discovered that it was only a matter of finding the right target audience of a large enough size and targetiong them with inexpensive highly targeted marketing. This was where my online marketing knowledge came in handy and I tried to design marketing programmes to reach the market cost effectively.

While I cannot share the complete marketing plan, I can just give you a feel by mentioning we proposed that the modified Nano (to Australian rules and conditions) be sold at a target price of AU$7000 in the Australian market with young female students and female working professionals living close to work with the incentive to buy a new car with warranty at a second hand car price.

This marketing plan project was a lot of fun and we ended up working several nights. Michael Yu and Kaushik Saksena, my other group members took to Nano as fish takes to water and were as excited for it as I was. 

My second connection with Nano is my deep interest in products that are aimed at the bottom of the pyramid - products and services that seek to serve low income customers while still making money - tons of it. And still maintaining a respectable quality.

Predictably, one of my all time favourite books is The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks). The book describes products such as ITC’s e-chaupal, Amul’s milk revolution and other commercial projects that are money ’spinners’ not money ‘losers’ and are still benefitting the community which is either at the supplier side (like in the case of Amul where thousands of Indian village women that comprises the supplier side) or the buyer side (like Ginger Hotels which offers great hotels - clean, hygienic but self-service and low in luxury at highly affordable rates). Those who have less money do spend their money. The challenge for the business is to provide value that they can afford without compromising on respect for their expectations and quality. And still make money as the poor and middle class make up for their price per unit by the sheer volume of sales.

Tata Nano has shown that it is possible to build a product and a business that caters to the aspirations of millions. It’s certainly hard work but it’s possible.