Background of company
Tata Motors was formerly known as TELCO (Tata engineering and locomotive company). It is one of the multinational automobile corporations located in Mumbai, India. This organization is considered to be the largest manufacturer of passenger automobile and commercial vehicle in India. This is one of the parts of TATA group (Tata Motors, 2014). Company was ranked as 20th largest automaker by OICA; in 2006. In the year 1945, Telco began their operation and they manufactured their first commercial vehicle.
This manufacturing was in collaboration with Daimler Benz AG (Tata Motors' Nano strategy was flawed, 2013). They ended their operation with Daimler Benz in the year 1969, when the organization got themselves listed in NYSE in 2004. Further, in 2005 company was ranked among the top companies in India as it was having an annual turnover exceeding 320 billion. Tata motor is stated to be the leaders in commercial vehicle in each segment of their operation.
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“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts leads to the action”- Dr. A.P.J. Abdul Kalam
These motivational words expressed by India’s former president Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata. He was the former chairman of Tata sons. In the year 2000, he has been awarded by highest civilian award Padma Bhushan. In 2003, Mr. Ratan Tata dreamt of bringing out a car for middle income people, which will be safe and affordable. After 5 years of proper research, overcoming all the barriers relating to financial and technological he kept his promise and came up with Tata Nano. In the process of manufacturing, Tata motors have added 40 patents to its credit. Car was launched in the year 2008, in 9th Auto expo. Company launched this car with a price tag of $2500. Newsweek identifies Nano to be “new breed of 21st century cars” “a contrarian philosophy of smaller, lighter and cheaper”. Even Wall Street 2013 Journal expressed that Nano will be leading a global trend towards small cars (What's the future for Tata Nano?, 2013).
Mr. Ratan Tata’s major strategy to come with such a car was all because of his awareness, that majority of the Indian people have two wheeler transports and could not afford a four-wheeler car. In the beginning when car was not launched, the industry had a conviction that no company can produce such an affordable car. Even in the initial stage media speculation rumored that it will be a simple four wheeled auto rickshaw (Choubey, 2013). However, Times of India reported that “Tata Nano is properly designed and a built car”. Further, Mr. Ratan Tata reported that Tata Nano is not a car with plastic curtains or no roof; rather it is a real car. There were various expressions given by other competitors in the market, when Tata Nano was first time launched in the market. Suzuki stated that it is impossible, Daimler Chrysler expressed that Tata Company is trying to tap an important market segment and Volkswagen argued that it is not the way they want to do (Kuila, 2013).
Any change in the organization depends upon the future goals and objectives of the business. Decision of the management is to implement the change in its current business operation due to accomplishment of those objectives. There are some factors which derive that there should be organizational change in the business (Bevington and Samson, 2012). It may be due to technological development, strategic change due to market condition, competitor’s strategy of customer demand. There are also some other factors which leads to change in organization such as business culture or it may be due to adoption of new legislations, laws and policies (Hayes, 2014).
Author Rao and Prasad (2012) has critically evaluated about the change in business organization of Tata Motors. They reveal that organizational change is based on planned framework of management and it is due to some reasonable factors (Rao and Prasad, 2014). Considering on the organizational change, the authors have evaluated that for introducing an affordable car that is Tata Nano, company has implemented major changes in its business organization. These changes were based on some key aspects such as objectives of Tata related to cost ownership etc. But there are some key factors which were planned by the Tata Motors while implementing the change (Venkatesh, Lawrence and Chen, 2013). These are related to coalition, vision of change, short-term plan base on short term winning and to develop the change in corporate culture of Tata Motors.
Overview of topic
Strategic marketing is considered to be an organization strategy that will help in combining all the marketing goal of an organization into comprehensive planning. It can be said that an effective marketing strategy purely depends upon market research and focus on right product mix. This helps company to increase its profit potential and sustainability of business (Strategic marketing, 2012). Marketing strategy of an organization is said to be the foundation of marketing plan. In other words, Strategic Marketing is ways to show different from the competitors' sales strategy where by company can deliver value added goods or services to their customers (Graham, 2008).
Well before the launch of Tata Nano in the market, its logo was already set in the mind of Indian citizens as “The people’s car”. This is how Tata motor started its advertising campaign for the people of India. This marketing strategy of company had a great effect in the mind of middle class people of India and they have already begun dreaming of their own car. Nevertheless, it was important to understand the marketing impact on Tata motors. For company it was becoming difficult to predict the sales potential of Nano(Tata Nano: Marketing Strategies, 2013). However, Tata motors were aiming to build up the cheapest car, in order to fulfill the expectation of consumers. Tata motors marketing strategy for Nano has leaded the car to be a discussion point for the country with a population of 1 billion. Further Even Tata company thought that there was having no worries of marketing of Nano at a particular time. Everywhere around the nation such as TV channel, investors, citizens, automobile industry experts and many other was discussing that “Is it really possible” to have a car with such features (Business plan: Tata Nano, 2009). Tata motors marketing with respect to advertisement of Tata Nano has lead into huge positive success for the business. It has perhaps reduced the overall marketing cost of Tata. People had only one question in their minds that “when can we buy the car”.
In the year 1991 with the de-licensing in the Indian automotive industry it has lead the sectors towards a growth by 17%. The industry has helped in generating employment level by 1.31 crores. Car market in India is generally covered by some popular brands such as Maruti Suzuki India, Honda, Toyota and Hyundai. In year 2014, it has been found that domestic sales in automobile market have increased in July month. India’s largest carmaker stated that there domestic sales has increased by 19.9% to 90,093 units. Due to sluggish economy, there was a fall in the overall demand in the auto industry products. There have been various initiatives from the part of government, in order to support this sector. Government in their interim budget reduced the excise duty on small cars, motorcycles and commercial vehicles by 12% to 8%. India is considered one of the key players in the automotive sector with respect to policy, actions and strategies of players. All these factors leads India to have a fundamental impact on the global auto landscape. It is estimated that India is going to exceed every major European market by 2015. Presently country is the 4th largest in the automotive sectors in terms of volume in the world. Further, it was also found that India automotive sale is also going to exceed US market by the period of 2030 (Rao, 2012).
India is one of the largest and fastest growing economy in the world. From every year, the standard of living of a consumer is increasing with the escalation in their needs. Consumerism in India is into newer heights and is shifting to a different era. Buyers of India is having exposure of the entire market of the world, leading to bring out the best goods and services in home country.
In India, roads are considered the most dominating transportation in present. These roads carry almost 90% of passenger traffic and 65% freight. In Indian roads, the capacity of lane is low. It has been seen that there are almost two lanes or less in national highways. Most of the Indian roads are congested; poor quality and maintenance of these roads also stay very poor.
Research framework analysis
For any study, this section is considered very important as it helps in drawing out effective results. The entire research framework for a research is based on the objective of study. Here author decided about various tools and techniques that can use in the present research.
Research design-Researcher will apply Descriptive marketing research (Research design, 2013). Descriptive marketing is a form of conclusive research used to describe both the composition of a group in such terms as income, gender, age and education and the characteristics of group members in regards to both current and future behavior.
Research strategy- Author is going to adopt survey method as a research strategy for this study. E-mail survey method will be approached using questionnaire technique. This tool will help as TATA Nano is only available in India. This strategy is also helpful as e-mail survey can be useful for close-ended questions and highly effective in customer research.
Data collection and analysis- Data will be collected from the interview method and it will be accessed from managers of the Tata Motors. Exploratory method of interview will be used on the basis of which information related to marketing mix of Tata Nano will be accessed and this data will be analyzed by using thematic analysis of qualitative technique .
Significance of research
The study will help in understanding the impact of marketing on Tata Nano. Even this research can be helpful for those organizations that are into automotive sector, as it will help them to cope with strategic marketing. Other researchers can use this research in order to develop better theoretical background for their study. This research will give an overview regarding factors that affect the marketing, to those businesses who wants to come up with a new product in the market. The dissertation will also explore the challenges associated with strategic marketing.
Literature review section of this study depicts about the findings, reviews and results of the different authors and researchers who also have studied their researches in strategic marketing. In this section of the research project viewpoints the authors is detailed which is based on examining the impact of strategic marketing and challenges involved in it. Strategic Marketing implies about that marketing strategy of the company which totally differentiates from competitors and is based on some specific strengths of the organization (Griffin,2002). Primary aim of this marketing strategy is to offer valuable products to its customers. On the other side exploring the concept of marketing also helps in suggesting the better measures which can be applied by Tata to increase their sales (Tinson, 2004).
According to Tinson, (2004) Strategic Marketing is the combination of the strategy and marketing activity of the business organization in order to deliver valuable product to its customers. The main aim of the company to use this concept is to successfully deliver the product to their customers which are differential from the other products of the market (Tinson, 2004). In this marketing tactic, firstly management makes the strategic planning, then analyses the strategy, formulates them and on the basis of which final strategy is implemented by the organization. In marketing the initial process is comprised of internal and external analysis of the environment and then strategies are formulated (Sikdar and Vel, 2010). It includes the strategies related to targeting, positioning, branding, innovation, product development etc. Finally on the basis of the marketing planning the strategies are implemented.
Focusing on the strategic marketing of the Tata Nano, Tata has adopted an innovative concept for marketing of its Tata Nano car. According to Kurtkoti and Prabhu (2011) company has designed its marketing strategy by attracting the customers through offering one of the cheapest cars in the world. Company has not only attracted the customers of India but also caught the attention of other car manufacturers of the world. In its marketing activity, company has used tactic of price driven marketing strategy.In terms of Indian currency, pricing of Nano was just rupees 1 Lakh or in terms of UK currency it was of only £1015 (Kurtloti and Prabhu, 2011). At this affordable pricing, the company was also offering some value added features in this product. As per the views of Velu and Khanna, (2013) With the help of strategic marketing tactic, Tata Nano is comprised with the features such as comfort, fuel efficiency, low emission and compatible with low parking space (Velu and Khanna,2013). Involving of these features and using of pricing strategy has enabled Tata to make them different from other car manufacturers (Glynn,2011). Combination of these strategies acts as a competitive advantage and also has made differentiated image in the mind of customers.
Cole, (2003) has examined in their study that the concept of strategic marketing begins from the strategic planning as it includes the systematic process which gives the direction to the business that what they want to pursue (Cole, 2003). On the basis of this information, management allocates and plan for the resources for its marketing technique (Henry, 2008). Marketing strategies includes a successful marketing plan which assists the business in achieving the objectives of strategic marketing and also the rationale behind selection of strategies. All these significant aspects of strategic marketing pay greater impact on the marketing strategies of the companies (Ferrell and Hartline, 2011).
According to Ferrell and Hartline, (2011) in a marketing it is essential that a successful marketing plan is to be included. It comprises of some primary activities on the basis of which the company plan for its strategic marketing while launching of its product in the market (Dann and et. al., 2007). For the strategic marketing, company first analyzes the situation, examine the opportunities and then finalize its goal and objectives for its marketing technique. All these activities are planned in marketing plan of the business as it also comprised of activities related to advertisement, promotion, distribution channels and other estimated information related to sales projection.
Parvinen, Tikkanen and Aspara, (2007) Organizations select its strategies on the basis of some reasonable actions as it facilitates them in their decision making that what factors are to be considered on its strategic marketing (Parvinen, Tikkanen and Aspara, 2007). Factors which are considered by the company are related to economic conditions, demographic factors, political and legal actions and also the social and cultural factors (Wilson and Gilligan, 2012). On the basis of this information management takes their action that how they will attract the customers of market with their strategic marketing tactic. In the case of Tata Nano, company has deemed all these factors during its planning of strategic marketing. Company was launching a car which is totally different from the other products of the market. They have emphasis on all the different factors. For example the car was specially launched for middle and lower income group which is the part of demographic factor (Rao and Prasad, 2014). Another is legal factor in which fulfils the obligation of fuel efficient and low emission vehicle. Look and design of the car was very small and stylish which suits to the choices and needs of the people.
As per the views of Venkatesh, Lawrence and Chen, (2013) one of the main factors which were emphasized by Tata Nano in its strategic marketing was the economic conditions (Venkatesh, Lawrence and Chen, 2013). The rationale behind selection of this important factor and which also helps the company to attain positive impact on its business was the economic condition of the India. In India people are not capable enough to buy a four wheeler vehicle as the prices are too high. Main aim of the Tata Company was to launch that car which fulfills the needs of Indian people basically who belongs to the lower and middle income level group. Company has launched a car which is one of the world’s cheapest car and with variety of features and also named this product as a “People’s Car” (Tata Motors' Nano strategy was flawed, say experts, 2013). In adherence to all the aspects of strategic marketing, Tata has used its marketing strategy in Indian market.
Dimensions involved in Strategic Marketing and its impact
McAlister and Ferrell (2002) ahs critically evaluated about some dimensions and concepts which are involved in strategic marketing which are considered by the organization while implementing its strategic plan (McAlister and Ferrell,2002). These dimensions enable the business organization to successfully develop its marketing strategy and also to attain competitive advantage in the market (Malcolm, 2006). Below are some dimensions and concepts which are involved in strategic marketing are detailed. It also makes huge impact on the strategic marketing of the company.
According to Graham(2008) Marketing capabilities of the company implies about the marketing resources which determines that whether it will provide competitive advantage to the business or not. These capabilities made huge impact on the business for achieving the competitive advantage (Tzokas, and Saren, 2004). It includes the marketing capability of the business firms in terms of developing strategy, relationship with customers, pricing strategy, process of management, key resources and also includes the innovation and technological development (Graham, 2008).
Strategic marketing of Tata Motors involves all these factors while launching a car at an affordable price. First was a key resource which includes the team of highly professional and skilled employees, second was relationship with the customers as brand name of Tata in Indian automobile market. There are capabilities in terms of designing a car at cheaper price and resources which are capable enough for offering wide varieties of features in Nano.
Mainly there are two different approaches of marketing orientation. First approach is based on the features of the product.These products are purchased by the customers due to its quality, characteristics and price (Jaakola, 2006). On the other side the next approach of marketing orientation is based on satisfying the needs and demands of the customers.Application of any of these approaches makes greater impact on the strategic marketing technique of the business organization in this current competitive market(Ambler, Kokkinaki and Puntoni, 2004).
Jaakola(2006) has inferred in his study that dimension of marketing orientation has made huge impact on the strategic marketing of Tata Motors. They are offering a car which is at very lower price and has an inclusion of variety of features such as comfortable, small size, safe and also fuel efficient (Parvinen, Tikkanen and Aspara, 2007). It fulfills the first approach of marketing orientation. In addition to this Nano also has fulfilled the second approach of marketing orientation which was satisfying the need of Indian Customers as majority of the people of country are not capable to purchase any four wheeler. Launching of Nano has fulfilled the need of low and middle level income people of India to buy a car (Kurtloti and Prabhu, 2011).
Strategic Marketing with Positioning
Researcher Vassinen (2006) has critically evaluated some factors which makes direct impact on the strategic marketing of the company. These factors are objective of business on the basis of its key resources, competitive strategy, operational performance and marketing orientation (Vassinen, 2006). Positioning of products in the market is based on some key strategies of the company which may be of differential product, cost leadership or having advantage of low cost at which wide varieties of features can be offered in its product. Achieving of any of thesestrategies, assist the business to attain competitive advantage (Jaakola, 2006).
Tata Nano car has created its position in Indian Automobile market. Strategic marketing of the Tata Motors is involved with the characteristics of low cost and differential product (Kurtloti and Prabhu, 2011). Company has manufactured the car which is at very low price an even offering wide range of facilities in its car. These features were the key aspects of the strategic marketing of Tata Company. After launching of Nano car, company also has planned to launch its car in other developing nations of the world such as Indonesia and in mnay other countries of Asia.
According to Hooley and Greenlay (2005) companies which have high degree of innovation creates their differential image in market in compare to its competitors. They are capable enough to offer something different as it is the constituent of successful product development (Hooley and Greenlay, 2005).
In strategic marketing of Tata Nano, company has effectively used the dimension or concept of innovation orientation in their product. They had innovated car which was smart enough with the features which are offered in a car with high price. By using the advanced technology and some innovative concepts in Nano car they had attracted the customers to the buy one of the cheapest car in the world. Company has made it possible by accumulating a team of highly professional and skilled engineers who were engaged in this project from last 2-3 years to build a car with a cheap cost and also includes variety of features. Advanced technology andmodern ideas were implemented by Tata and greater focus was paid on the cost of production and to fulfill the needs and demand of customers of middle level income group of India.
Strategic Marketing at new product launch
Doole and Lowe, (2008) have critically evaluated in their study that before developing the strategic marketing for launching of new product, it is very essential for the business organization to set the goals and objectives which they want to achieve. Good strategic marketing of the company includes the appropriate plan on the basis of which final strategy is adapted (Bryson, 2002). Aspects which covered in strategic marketing are. First is selection of the key buyers or customers of the product, recognizing the segments in which company will sell their products and then planning is made regarding distribution channels. Further in the next step, strategy for the unique positioning is created and also the approaches are decided that how they will compete in that particular segment (Roetzer, 2011). But in the main focus which is paid by the company while launching a new product and to implement the strategic marketing is to plan that why their product is unique and different. In addition this pricing is also the key factor which plays significant role in strategic marketing (Doole and Lowe, 2008). Price is the primary factor which determines that whether it will lure the customers to buy the new product of the company or not.
On the other side, business also focuses on the advertising and promotional strategies that how the new product of the company should be promoted to attract the customers and influence them (Ferrell and Hartline, 2011). Before launching of a product which is new and to lure the customers it is very necessary for the management to plan such marketing technique which is based on specific strategy. Considering on the strategic marketing of Tata while launching of Nano car in the Indian market, company has planned its entire strategy by considering price, unique features, segmentation and promotional tools and also about the elegant features of Tata Nano. Company also has focused on the aspects of consumer behavior so that people can understand that why company has launched this product in the market (Rao and Prasad, 2014).
Strategic marketing of Tata Nano involves all the aspects. Firstly the pricing of the car was very affordable and company has inferred that its Nano is one of the world’s cheapest and smallest cars which will be available at price of INR 1 lakh. It is launched for the people of India who belong to the group of lower and middle level income group. It was the reason that Tata has also named the car as “People’s Car” (Tata Nano: Marketing Strategies, 2013). Elegant small design and the small size of the car were some of the key factors of strategic marketing of the company.
Other key aspects which were considered by the Tata in its marketing tactic were related to the consumer behavior that the product is greater value of money. At very affordable price, company is offering a four wheeler vehicle, good engine capacity and variety of features and many other factors which infers that product is termed as value for money (Kurtloti and Prabhu, 2011). To sell its product in market, company also has focused on its distribution channels at the time designing of its marketing strategy. One of the key feature in Tata Nano’s strategic marketing was the booking window which remained opens for 17 days and on the basis of lottery system, company has sell its car to its products. Other distribution channels were online booking facility, 214 Dealership stores of Tata and also many other options were offered by the company for it product (Business plan: Tata Nano, 2009). On the basis of the strategic marketing of Tata Nano, it was determined that how effectively the company has planned its approach of strategic marketing to influence the consumers of market.
Strategic marketing of Tata Nano
With the help of marketing Tata Nano wants to make differential image in the mind of the customers and also to attain competitive advantage in the Indian car market. Company has combined some unique features in their product which make their car different from the other cars (Vassinen, 2006). In terms of product mix, the company has done the marketing of Nano by offering stylish design, comfort, fuel efficiency, also an eco-friendly car. In terms of branding Tata Nano already has incorporated with the one of the famous brand name Tata Motors (Malcolm, 2006). One of the major parts of company’s strategic marketing was the pricing strategy.
Pricing of Nano was only One Lakh rupees, which infers about which can be easily afford by middle level income group. On the other side the promotional activity of the company was very unique and has made positive impact on Tata Nano. Tag line of the company was also very catchy “Have Fum, pay Less, Get More with Tata Nano” (Velu and Khanna, 2013). In its promotional activities company has used wide range of promotional activities which includes online advertising, newspaper, print media, television ads, marketing campaign etc. The major strategy of the company was to develop a low cost product through which they want to fulfill the dreams of middle level people of India (Rao, 2012). On the other side company also has efficiently use its concept of strategic marketing which implies by using of optimal resources to develop a product with lower price.
Challenges involved in Strategic marketing of Tata Nano
Increasing international competition: Brooks and Simkin, (2012, pp.494–514) has concluded that “High competition in the international market is the most crucial challenge for each organization at the time of introducing new product in global market”. Tata Nano has been facing such types of strategic challenges at the time of marketing of Nano car in the international market. On other hand, Holm, (2006) has concluded that “High competition has influenced the overall performance of the company and augments the overall cost of the products and services” (Holm, 2006, pp.23–33). This statement has described that strong competition in the global market has increased the cost and reduced the overall profitability and income of the Tata. In contrast Narasimhan, (2005, pp.323–324) has concluded that “In the high competition organization should focus on effective marketing planning which can improve the overall performance of the company and resolve the strategic challenges also”.
Human relations problems: Fuchs and Diamantopoulos, (2010) has concluded in their study that “strategic marketing challenges of an organization also include the problem of human relation management” (Fuchs and Diamantopoulos, 2010). This study has helped in analysing that Tata Nano has also faced the problem in employees and customer relationship management which affect the marketing performance of the organization. On other hand Narasimhan, (2005, pp.323–324) has provided different view towards the strategic challenge that “Human relationship problem can be resolved by the appropriate HR practices for employees as well as suitable identification of customer’s requirements” (Narasimhan, 2005). Thus, for resolving the human relation problem Tata Nano has faced different challenges regarding the modification in the HR practices and identification of the customer’s requirements. On the whole, such types of strategic challenges affect the advertising presentation of the organization in the international market.
Problem in assessment of the marketing performance: Salaimeh, 2008 has concluded that “After implementing the strategic marketing plan organization also faces the issue in assessing the marketing performance” (Salaimeh, 2008). It shows that at the time of marketing Tata Nano has countenanced the problem in evaluating the overall performance of their marketing planning in terms of customer’s awareness and advertising, brand image and promotion. On other hand, Daft, 2008 has asserted that “marketing performance can be measured by the different techniques such as histogram and metrics but all requires high skills and knowledge” (Daft, 2008). Thus, measurement of the marketing performance through the different statistical tools and techniques was also a major issue for Tata Company at the time of strategic marketing of the Nano Car.
Marketing cost and budget: Salaimeh, (2008, pp. 454-457) has provided their view that “sometimes organizations focus on the cost reduction of the new product which leads the low marketing budget for the organization”. Major objective of the Tata organization was reducing the overall cost of the Nano car. At that time it was the crucial strategic marketing challenge for organization to enhance the customer’s awareness and brand promotion of the products with low marketing budget. On other hand Dooleand Lowe, 2008 has stated that“Low marketing budget is also associated with the poor marketing performance of the company which leads the low profitability and income of organization” (Doole and Lowe, 2008, pp. 32-33). It reflects that Tata Company has been facing the strategic problem in reducing the overall cost and managing the low marketing budget at the time of marketing of Nano car in Indian market (Salaimeh, 2008).
Lack of planning and execution: Parry, (2004, pp. 35-36) has stated that “strategic planning and implementation process is also a major challenge for each organization at the time of marketing of their products and services”. But, Tata Nano has focused on its marketing planning and execution process for maintaining their cost and marketing budget and efficient marketing performance in the international market. So, lack of strategic planning and implementation was not a major issue for them at the time of marketing. On other hand Ries, 2003 has stated that “formulation of strategic goals and objectives are also a major problem for marketing department of the organization” (Ries, 2003). However, Tata Nano organization has hired experienced and skilled employees for marketing activities of the company which has formulated smart objectives for the organization which helped in attaining the required marketing performance of the company (Parry, 2004).
Consumer Buyer Behaviour Relating To Car Buying
The concept of buying behavior is very crucial in the area of marketing and has evolved over the years. Hence, it is very essential to understand about what role is played by consumer buying behavior in creating an overall impact on purchase of products. It is a known fact that the wants exhibited by human beings are unlimited and there expectation is to seek more benefits (Blackwell, 2006). In this regard, the existing car models are no exception to the behavior. This has therefore led to a constant modification in the car model and the features. Hence, the car market is a very important place to study about the behavior of consumers so as to provide a useful insight about what is the expectation of consumer towards the product (Kahle and Close, 2011). It is only by research that the company will be able to study the behavior of buyers.
Car buying is regarded as a major investment where the final choice decision is made by making a careful consideration for the available alternatives. This is as consumers are no longer contented towards acquiring the basic vehicles but further seek a variety. It ranges from mini cars to large SUV’s. The car market is quite fragmented as well as heterogeneous in nature. Most importantly, in Europe there is a presence of around 50 brands which offer a range of models present in different car type segment (McEachern and et.al., 2007). There is a presence of wide price range where the cost of sedan may be as much as ten times more than a small car.
The buyer behavior related to car purchased can be explained with the help of following diagram. While making a decision related to purchase of car the consumer passes through five stages. These are in terms of problem recognition, information search, evaluation and selection of alternatives, decision implementation, and post-purchase evaluation.
- Problem Recognition: In this, the consumer mat experience problem in terms if issues faced with old car or increase in family members. It is the arising of this need that forces the consumers to move towards other stages of consumer buying behavior.
- Information Search: As soon as the problem or need for purchase is recognized then he starts making an information search for it. The individual in search of a new car is likely to pay more attention towards the ads that are related with car (Bigne, Ruiz and Sanz, 2005). He may pay more attention to those conversations that are on car. He may further focus on the cars that have been purchased by his friends or family members. It is only by gathering of information that the consumer learns about the brands of cars that are present in the market along with there features.
- Evaluation and Selection of Alternatives: The consumer may come to varied kind of car brands. These may have got different features, looks, design, mileage, comfort, pricing, styling among others. Hence, the consumer is thus required to select that alternative which is feasible as per his requirements. For example, if the focus of consumer is on buying a low priced car then he is likely to purchase Alto, Nano among other. But if he wants to buy a luxurious car then he may start to look for Sedan, BMW among others.
- Decision Implementation: Next stage is to make decision about the purchase of car. The decision can be made in three ways. For example, while making the car buying decision, the individual may select from the set of brands present in front of him. These may be based on technical features of product being car followed by checking on the availability of brand in market (Carrington, Neville and Whitwell, 2010). It is also possible that while carrying out the decision to buy the consumer may choose from one or two brands that are present in the outlet. Once the final decision on brand and outlet has been made then the consumer moves towards making decision of buying the car.
- Post-purchase Evaluation: After the individual has bought the car of his choice, then he is likely to evaluate it so as to find out that whether his purchase decision was right or not. Here, the process of Post-purchase evaluation processes is influenced by preceding decision-making process.
Research methodology section is one of the significant parts of the study as it includes all the tools and techniques which assist the researcher to critically examine the impact of strategic marketing of Tata Nano. Methodology section helps to explore the subject matter in-depth way and also recognize that why this tactic of marketing is important for the business (Crowther and Lancaster, 2012). Current report is based on qualitative and quantitative aspects. On the other side, researcher also has used primary and secondary method of data collection to investigate the impact of marketing tactic in current competitive scenario.
From the two different philosophy of research, intpretivism was applied in this study. Rationale behind applying this research philosophy was to evaluate the impact of strategic marketing on the customers of market that how customers were influenced from this marketing strategy (Burns, 2008). In addition to this, it also facilitates to examine the response of customers that how they were influenced from the new product of Tata that is Nano. Positivism is also one of the philosophies but this was not applied in the current study as it generally used to examine some quantitative results which show the specific results (Saunders,et. al., 2006).
There are different types of research design which includes exploratory, experimental, descriptive, causal etc. but in the present study as per the aim and objectives, descriptive research design was used (Zikmund,Babin and Griffin 2013). To investigate the impact of strategic marketing of Tata Nano and the challenges which were encountered by the company while planning for their strategic marketing, descriptive research design was very appropriate for the study. On the other side using of descriptive design also enable the researcher to focus on the subject matter in detail manner (Crowther and Lancaster, 2012). Impact of the strategic marketing of Tata Nano in the Indian market has influenced thepeople in very prominent manner and to examine the result of this strategy, descriptive research design was the best technique.
Inductive approach was used in the research for assessing the impact of strategic marketing of Tata Nano. Through this approach researcher has tried to form some broader form of results that how this marketing tactic has influence the customers (Jonker and Pennink, 2010). Deductive approach is also another tool of research approach but application of this approach was not appropriate to conclude some generalized form of results. Another reason for using the inductive approach in the study was to evaluate the insight details about the subject matter of the report and this also assist to suggest some measures through which company can improve its marketing strategies (Saleem, 2008). Through this research approach the researcher has analyze the strategic marketing of Tata Nano in prominent manner and also the challenges faced while framing this type of strategies for the business (Saunders et. al., 2006).
This study includes the aspects of both qualitative and quantitative type of research. Deployment of combination of different research type has enabled to investigate the subject matter in proficient way (Bernard, 2002). As per the aim and objectives of the report, using of these techniques has facilitated to form precise conclusion and findings. It was very important to acknowledge that how the strategic marketing of Tata Nano has made greater impact on the market. Interpreting the impact of strategic marketing of the business during the launch of new product in the market on the basis of qualitative and quantitative aspects has also facilitate to generate valuable findings for the study (Johnson and Clark, 2006).
Data Collection Method
Data was collected from primary and secondary method. The rationale behind collection of data from the two different sources was to see the sights of strategic marketing in these tough competitive markets.
Primary Method of Data Collection
For accessing the primary information from the market, method of questionnaire was used in order to assess the impact of strategic marketing of Tata Nano. Using of the primary method in the report was to access the real and accurate information about the impact of strategic marketing of business and also to evaluate that whether it was effective or not (Collis and Hussey, 2014). Though there are different methods of primary data collection such as interview, observation etc. but in context to this study and as per the appropriateness of the researcher, questionnaire method was best and feasible technique. Information which was collected from this method was primarily based on aspects of strategic marketing only. So that customers and employees of Tatawere able to give reasonable and valuable answers which are reliable for the report (Goddard and Melville, 2004). One of the major disadvantage of collecting the data from primary mode was time and cost. It takes enough time to collect fresh or firsthanddata which is not yet collected by any other person.
Secondary Method of Data Collection
Data was also collected from the secondary sources of information and these were specifically based on the strategic marketing of Tata Nano. Data was collected from the journals, researches, online articles, newspapers and form many other websites (Zikmund,Babin. and Griffin 2013).
The main purpose of accessing the information from this variety of secondary sources was to evaluate excess amount of information on the strategic marketing tactic of Tata. Another advantage of this method was to recognize that what major improvements can be made by the company to enhance the effectiveness of its marketing strategies so that customers can influence in more appropriate way (Daniel and Sam, 2011). All the data which was access from the secondary mode of data collection was collected from the authentic and valuable sources which help to form valid conclusion and findings.
From the two different methods of sampling that is probabilistic and non-probabilistic, probabilistic sampling was used in the study. Further in order to collect the data from customers and employees of Tata Nano, purposive sampling a part of probabilistic method was used. Reason of purposive sampling in the report was to collect the data from those samples which were basically belongs to objectives of the research (Melville and Goddard, 2004). It was essential to access the information from the customers of Tata Nano only as they infer about the impact of strategic marketing that how they were influenced (Gravetter and Forzano, 2006). In context to the size of the study, sample size was 50. Primary data was collected from the 50 customers of market and 5 managers, with the help of questionnaire method data was collected and analyzed.
Data Analysis Technique
For analyzing the primary and secondary data, researcher has applied qualitative and quantitative techniques of data analysis. To examine the data in qualitative aspect, thematic analysis was used (Crowther and Lancaster, 2012). It is the technique through which different themes were prepared in order to examine the impact of strategic marketing of Tata.That how with the help of this tactic, organization has influenced the customers of market. The rationale behind using this technique of qualitative analysis was to comprehend the subject matter of the study in more detail manner. Challenges which were faced by the company during the launching of Tata Nano in the market were also assessed with the help of thematic analysis only (Johnson and Clark, 2006). Another method which was applied to analyze the primary data was the tool of quantitative data analysis.
SPSS was used to analyze the primary information and it was investigated by using method of descriptive analysis. With the help of this technique, information was presented in graphical and tabular form and further it was explained (Saunders et. al., 2006). Using of two different methods, qualitative and quantitative data analysis has make the findings and results of the report more appropriate and effective. On the basis of outcomes which were generated after analyzing the primary and secondary data, researcher has detailed findings and conclusions of report (Zikmund, Babin and Griffin 2013). Further on the basis of these results, some recommendations were also proposed for the Tata to make its approach of strategic marketing more effective.
Validity and Reliability
In consideration to the validity of the data and information which was represented in the study, researcher has access the data from authentic and trustworthy sources (Burns, 2008). Greater emphasis was paid by the researcher for accomplishing the aim of study that was to assess the impact of strategic marketing of Tata Nano. In addition to this researcher also represented and analyzes the data in reliable manner. Care has been taken while analyzing the data and exploring the subject matter of the report. Information was represented in chronological manner so that aim and objectives of the research can accomplished in proficient manner (Collis and Hussey 2014). Reliability and validity is the key constituent of any research project and sustaining these two aspects depicts about the appropriateness and consistence of the outcomes. Researcher has detailed the findings and conclusions of the report without any biasness and misrepresentation of information.
The present research based on analyzing the impact of strategic marketing and organizational change on Tata Nano, primary and secondary research has been conducted. Hence, it is very essential to take care of the ethical considerations so that confidentially and privacy of data can be maintained (Goddard and Melville, 2004). Research has focused on the following ethical considerations that are mentioned below.
- Focus has been given on the concept of debriefing where the exact reason for undertaking the research has been communicated to the respondents. This was a must so that respondents are ready to be a part of research and do not leave the study in between.
- In the same way, it was made sure to take consent from the respondents while undertaking the techniques of primary data collection. In this regard, a prior permission was undertaken from consumers of Tata Nano so that fruitful and valid data can be obtained.
- Some of the consumers could have felt insecure in disclosing their personal information. Hence, utmost care was taken regarding the privacy of facts and figures revealed by them. It was made sure that all the data is confidential and no unwanted information was disclosed until and unless it was highly necessary for the research (Daniel and Sam, 2011).
- While collecting facts and figures form books, journals and online articles it was taken care that complete adherence was given towards the concept of plagiarism (Burns, 2008). This is the most important ethics which has been followed so as to make the current study valid as well reliable.
While conducting this study, the researcher has faced many limitations. These are related to constraint of time and financial resources. The study entailed for carrying out a research on a huge topic related to assess the impact of strategic marketing in case of Tata Nano. This topic required ample of information followed by in-depth research which was not possible due to limited time (Melville and Goddard, 2004).
In the same way, money also acted as source of constraint. This was in terms of collecting responses from consumers getting access to paid websites among others. Unavailability of exact data on Tata Nano further added constraints. In this regard, an attempt was made to overcome the limitations so that a fruitful research study can be conducted (Goddard and Melville, 2004). For this, in-depth research was avoided and focus was given only on the important information. Paid versions of sites were avoided. Instead matter was collected from books, journals and other online articles.
Features on which Tata Nano has emphasized in its marketing strategy
On discussion with the managers of Tata Nano regarding their marketing strategy, it was assessed that company has focused on the features of their product. At the time of planning of their strategy to attract the customers of Indian market, they have focused on some key features of car. These are different color variants, comfort, air conditioning, safety and convenience. This product is available at very affordable range and also comprised with variety of features. Managers also inferred that the while planning for the marketing strategy company has paid its greater emphasis on all those features which are available in other cars also. Major features on which company has concentrate are Intrusion Beam, Additional Body Reinforcements, Front & Rear Seat Belts, Booster-assisted Brakes, Center High Mount Stop Lamp and Remote Keyless Entry with Central Locking.
Marketing Approach of Tata Nano has enabled the company to achieve competitive advantage in the market
One of the main features of marketing approach on which Tata has focused was the pricing of their product and which act as key factor of competitive advantage in the market. Managers has reviewed in the interview that their marketing strategy for Tata Nano has enabled the company to achieve competitive advantage. This approach has focus on some key points which were the basic needs and demands of the customers of middle level income group as purchasing a four vehicle is not easy for them. Youth of country was also targeted as primary customers of the company and with the help of their strategic marketing approach they have attained competitive edge in Indian car market.
Marketing of Tata was the key factor to attract the customers to buy Nano
Managers of the company have responded during the interview that to influence the large number of customers, marketing approach has played very significant role. Without this strategy they cannot aware the customers about car which is available at very affordable range of price and also comprised with variety of features. On analyzing the responses of managers about their marketing approach, they have stated that this product is value for money which fulfills all the needs and requirement of customer while buying a four wheeler vehicle. On the other side from this primary study it was also assessed that along with the pricing factor, company has also focused on features of Nano car. This product accomplishes the needs of customers in all the aspects such as design, style, comfort, fuel efficiency etc. It is the basic need of middle class customer while buying a car and fulfilling of these needs will attract large number of customers.
Promotional and pricing strategy used to attract the customers of market and to make positive impact on their buying behavior
Company has incurred its highest expenditure on the electronic media to attract the large mass of customers and it was majorly on the TV advertisements and also on print media such as newspapers. From the interview it was assessed that to influence the buying behavior of customers, advertisement in TV channels was one of the effective medium to interact with the customers of Indian market. Further the company also has efficiently used the help of social networking sites and online websites to attract the customers and influence them to buy the product which is available at very affordable price range. On the other side managers of Tata also replied that in their entire marketing approach pricing was one of the prime factor through which they can attract the customers and also attained competitive edge in the market. Pricing of one lakh rupee car (£1015) is very affordable range which can fulfill the dream of buying a car of middle class people. From the interview it was assessed that pricing of the car was one of the key factor of their marketing approach.
Opinion of managers regarding the marketing strategy of Tata Motors that whether it was enough to attract the customers
Respondents of the primary research implied that up to some extent the strategic marketing approach of company was enough to attract the customers as they have focused on some key aspects of Nano car. These aspects were only available on higher range of product. In addition to this managers also stated in interview that the impact of marketing strategy of Tata can also be assessed from the pre-booking. Before the availability of Nano in car market, company has used its online booking system and at initial period with help of lottery system, Tata has sold the cars in market. It evaluates that marketing strategy of the company has make positive impact on market and also one of the major factor to influence the buying behavior of customers. From the reviews of managers of the company it was evaluated that at initial period during the time of launching a product in market the strategy of Tata Motors was enough to attract the customers of market.
In current scenario marketing strategy of the company plays very significant role for every business and it is only due to tough competition in market. Tata Motors has adopted approach of strategic marketing while launching of car which is available at very low price. Marketing strategy of Tata Nano is combination its marketing activities and their strategic approach. From the literature review section of the study or was assessed that there are some specific dimensions which are involved in strategic marketing and also makes greater impact on launching of new product in market. First is marketing capabilities which involve all those resources which are essential before launching product, second is dimension of marketing orientation. It includes three important factors which are related to customers, competitor and coordination (Doole and Lowe, 2008). Third dimension is positioning of the new product in market and it is to be with some key strategy such as pricing was one of the factors which have created unique position of Nano car in Indian market. Last dimension of strategic marketing was innovation and it also makes huge impact while launching of new product as it depicts about product equipped with latest innovation or technology.
On examining the reviews and researches on strategic marketing of Tata Nano, it was assessed that company has considered each and every aspect of strategic marketing in very coherent manner. In its marketing strategy, Tata has very elegantly deigned its product mix through which they had attracted huge number of customers. In their product mix portfolio they influenced the customers by offering stylish design, comfort and fuel efficient car. On the other side Tata already has its brand name in automobile market of India and one of the key features of their marketing approach was the pricing. It is the product which can easily fulfill the dream of middle class customers to buy four wheeler vehicles. Tata Nano was also promoted in very unique manner and one of the main parts of their promotional activity was its tag line that is “Have Fun, pay Less, Get More with Tata Nano” and also the name given to the car was “People’s Car” (Rao and Prasad, 2014). In its strategic marketing company also faced many challenges which were the international competition, managing human relations, issues of assessing marketing performance of their product and also to plan the strategy within a given budget and cost.
Objective of the study that is to assess the impact of marketing strategy of Tata Nano was effectively accomplished through data analysis section of the report. From the data analysis section which was based on qualitative and quantitative analysis of data collected from the primary and secondary method of data collection, it was concluded that the strategic marketing Tata Nano has made influenced the customers of market up to very greater extent. On analyzing the primary data which was accessed from the interview of Managers of Tata, it was concluded that company has accentuate on features of Nano car and on its marketing approach. In addition to this the pricing strategy of their marketing approach was the key feature which has influenced the customers to buy this product.
With the help of this section it was also concluded that the marketing strategy of the Tata Nano was enough to attract the target customers of company. Company has effectively used the electronic media and online advertising for the promotion of their product and pricing of product that is 1 lakh rupees (£1015) has make positive impact on buying behavior of customers. From the interview of managers it was also evaluated that accomplishing the needs and desire of middle class customers for car has attracted the customers to buy this product. At very affordable price range, Tata has offered a car which has design, style, comfort, fuel efficiency and all the basics requirements of car.
Impact of strategic marketing was also examined from the customer’s point of view as they were the key respondents of the study, as impact of strategic marketing of Tata Nano can only be accessed from them. Reason of buying this product and factors which have influenced them was assessed from customer survey and with the help of descriptive analysis their responses were investigated. From quantitative analysis it is concluded that in terms of product mix, customers has purchased the product due to features of Tata Nano and it was conclude from the highest mean and standard deviation of customers responses. Availability of car at such an affordable range with desired features was the main reasons which have influenced the customers to buy this product (Kurtloti and Prabhu, 2011).
Pricing was the key factor of Tata Nano’s marketing strategy as it has attracted the huge mass of middle class customers of Indian market as it is not possible for person to buy a car which has higher price. Availability of Tata Nano with price of just 1 Lakh (£1015) and also have elegant features has make positive impact on the customers. Form the study it was also concluded that advertising of Nano was also one of the key factor of their marketing strategy which influenced the customers to buy this product. The way Tata Nano has marketed its product in the market has created differential image in the minds of middle class people. Initially at the time of launching of Tata Nano, company has introduce the concept behind this product and states that it will fulfill the dreams of Indian people and also states that it is a “People’s Car”. It is the product through which customers feel their involvement. It was also proved from the analysis section that majority of customers were agreed that Nano was also popular through advertisement (Glynn, 2011). In last part of data analysis section, customer satisfaction was assessed. It found that customers were satisfied with the affordability diff of Tata Nano, they reveals that this car can easily be afford by anyone even middle income level.
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Customers were not satisfied with the safety of car as many of people have faced some issues. Considering on the overall satisfaction level of customers, they were neither too much satisfied nor very much dissatisfied. On an average as per the value of product this car has satisfies their basic need and also accomplishes their needs and desire as they do not have capability purchase car which is double than the cost of Tata Nano.
After accomplishing aim and objectives of the study which is based on examining the literature reviews and data analysis section, some recommendations are detailed. These will help the company to enhance the effectiveness of its marketing strategy and also will help to fulfill their target and goals.
Company can improved the effectiveness of its marketing strategy by targeting the other specific group of customers such as housewives, students, small businessmen etc. Now there is need to focus on other segment of market as targeting the middle class of people has fulfilled the objective of Tata Nano (Velu and Khanna, 2013). In India population of youth is very high and targeting on this segment will increase the sales of company.
Another recommendation for the company is that there is need to improve their advertisement and promotional strategies. These strategies are to be planned by concerning on the features of Tata Nano which will help the company to aware the customers that why should they buy this product.
In current promotional an advertising campaigns, Tata has not hire any brand ambassador or celebrities for its marketing strategy. In India, people are very much influenced from the ads and promo of the products and branding of Nano with some ambassadors or celebrities influence the people up to greater extent (Kurtloti and Prabhu, 2011).
Currently the company is marketing its product at national level only, now there is need to perform marketing of Tata Nano at global. Availability of car at such an affordable price will also attract the people of other developing nations of the world. This will help the company to expand its business in developing countries and to increase their sales revenue.
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