Thursday, June 07, 2012

Tata Nano Case Study - Missing the Invisible "P"

Tata Nano is now a case study across Business Institutes and Conferences. It's worth taking a look at what went wrong with a car that was threatening to clog the Indian roads.

In short, the marketers at Nano failed to understand their customers. That's a lot to say, given that the group has such hold on marketing and customer orientation. They thought Price ( one of the Ps of Marketing) is going to drive the product. However, what other "P" ( read PERCEPTION) this good old Price "P" is going to create is something that the marketers failed to gauge. Result: an over-hyped  product that fails to understand its TG and ends up delivering a non-desirable product.

Fortune at the bottom of the pyramid is often confused with low cost or low quality products. Contrary to that, people at the bottom of the pyramid have the maximum desire quotient. They are the ones who make the rags-to-riches story. A car is an item of luxury for them and they would not want to compromise with their dreams. Infact Ratan Tata was found saying that the Nano car had got the stigma of "car for the poor". Though personally I think he owes an apology to all the poor people because of this statement, from a marketing point of view, the strategy of making a car for the Aam Aadmi did not work out. The perception of buying less than the desirable created a strong barrier for adoption.

Tata Nano has implications for many a start ups who are now aiming at producing goods and services for the bottom of the pyramid.