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Tata Nano Case Study

Case Study showing the fall of Tata Nano


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mohith teppola

3 months ago | 3 min read
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Tata Nano was supposed to be Tata’s game changing vehicle. Termed as the world’s most affordable 4 wheeler with a compact design, it was meant to be the perfect vehicle for any average middle class individual. The product was ready to launch, the marketing campaign was to the point and attracted the users in the right direction. Everything was fine until the word “Cheapest” was used. During the initial stages of the marketing campaign instead of the term “Most affordable”, the term “The cheapest” was quoted,which made a huge negetive impact to the public view. The marketing team failed to understand the impact of words and the average Indian's psychology.

Most people in India like to own a Car as a status symbol rather than a comfortable mode of transportation, and owning a Nano didn’t really do any good to one's social status, rather it was bullied, it was called as “high end auto rickshaw” and people don’t really want to own something like that. During its initial production it had a lot of technical faults, with poor ride comfort and vehicles bursting into flames. All the negative backlash resulted in a drastic drop in its sales, becoming a total failure.

The technical faults were a secondary reason which contributed to the products failure,the primary reason still remains it’s marketing campaign and the word “cheapest”. The Success of the Apple iphone is the exact reason for the failure of Tata Nano. The success story of Apple iphone today is different from what it was 5 years ago. Apple is a premium mobile phone brand providing the best software security, because of which high profile people started using the iphone, this created an unintentional social statement as many believed owning an iphone made their lives premium. This created a sense of FOMO (Fear Of Missing Out)  and everyone started buying an iphone for the sole reason of social status. The Brand improved its every flaw and more people started buying it.

What could have been done by Tata Industries, if Tata Industries would have spent some more time on perfecting Nano and had conducted more hard tests for bettering the product, and Avoiding the word cheapest, the fate would have been so different. Tata Nano is compact, occupies less space and is perfect for 4 people. In a highly populated country like India, Tata Nano would have been an ideal vehicle.

What has happened, has happened. What can Tata Industries do to relaunch and revive the Nano. Tata industries should work on rebranding the Nano, they can work on Electronic Vehicle Technology. Tata Nano can be relaunched with high end modifications, instead of making it the most affordable, they can make it a bit premium and make it available for middle class audience, later they can cash in its success and launch a new variant, that is the most affordable. The necessary changes will be power steering wheel, premium leather seats, automatic gearbox, better engine and the most important, proper wiring as the previous Nano model faced so many backlashes because of poor wiring. Tata Industries can install the latest AI technology and introduce 3 variants initially, replicating the iphone’s strategy where one is the low end model which does not have the automatic gearbox and no AI auto driving feature, the second variant is more premium with automatic gearbox available, the third will have all the features and needs to be more premium. Initially the first versions of the new premium Nano need not be profit oriented, but should be focused on branding and clearing all its negative image. Once the product is on boarded and has gained the trust of people and is a legit premium product that is available at a much cheaper price compared to other brands, it has a genuine chance to find success in the Indian market. Also Tata Industries has won the bid to be Indian Premier league’s Title sponsor for a tenure of 2 years, which gives them the prime opportunity to market the product to its best. 

Once the product has cleared its negative image and gained a new positive image, Tata Industries can introduce the new affordable version of the Nano, just like the samsung's galaxy FE and the iphone’s SE version. This way the Nano will capture all sorts of audience in the market, at the same time will live its dream to create the most affordable 4-Wheeler ever.  

In the above case we can understand that the market is a tricky place to survive and will have to make each and every move with utmost care. A particular move can backfire at any-time, sometimes we need to be pleasing to our audience, other times we will have to stay firm with our decisions. Iphone has always stayed firm with its approach to remain as the premium product, while the Tata Nano, who had the purest of intentions to launch the most affordable 4-wheeler, backfired.\

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