Tata Nano Hbr Case Study

Chris Glendening                                                                           11/21/16

MAR745: Strategic Brand Management

Case Analysis- Week 7- Positioning the Tata Nano

Objective: Identify alternative options for Nano’s targeting strategy, and evaluate the pros and cons of each alternative. Based upon this analysis, recommend the best targeting strategy for the Nano brand.

        Analysis of Attractiveness: In order to determine TATA Nano’s targeting strategy, the attractiveness of segments needs to be analyzed.

Three major criteria for attractiveness in this case are the market size, growth potential, and competition. In terms of market size, one area is segment important to note. According to the case study, the most attractive market in terms of size in the market place is the ‘2 Wheeler’ market. 76% of all vehicle sales in India are two wheelers. The benefit here is with a low manufacturing price point of 1 lakh at its baseline model, TATA would be able to attract people based on its close price point to a ‘2 Wheeler’. The issue, is that ultimately the people in this market haven’t purchased a car because of fuel efficiency, low purchase and maintenance costs and small maneuverable size. All of these factors mean the size of the ‘2 Wheeler’ market will ultimately decrease potential sales if it is targeted.  

Another major target attractiveness criteria worth noting is growth potential. The article mentions to the growing middle class in India, growing from 19% in 2015 to 41% by 2025. The potential for ‘2 Wheeler’ consumers in the middle class to grow should be considered significant.  The article also mentions that middle class consumers have a household size over 5, which would lead to a need to transport the entire family. If said middle class consumers have ‘2-Wheelers’, as the vehicle population suggests, this could be a major segment in the future. However, a major concern here is the overall low per-capita ownership of automobiles- 12 car owners per 1,000 people. Even if the growth potential of the middle class is significant, the percentage of car owners must be increased if TATA Nano is to be successful. Changing influences of people from the more maneuverable mopeds or motorcycles to a full-size vehicle will be important. Additionally, the article mentions ‘that ingrained orientation toward seeking a bargain mean that the Indian middle class consumer is a tough customer.” Maintaining brand perceptions toward how economical the Nano is will be key.