1. The launch of Tata Nano was directed towards the achievement of the goal of being a car for the middle class people, who often travelled in two wheelers with their families (Kumar 2014). However, even after months of the launch of the Tata Nano, the sale of the car was sluggish as compared to Maruti 800, which was launched 26 years ago as well as the most recently launched people’s car, Ford Figo (Aschmoneit and Janevska, 2013). Various micro-environmental factors as well as the macro-environmental factors that are likely to affect the business case of Nano.
The micro environmental factors include the controllable factors such as the marketing mix and the company policies, along with the partially controllable factors such as the threats and opportunities, strengths and weaknesses. The strength of Tata Nano is the price and portability of the car (Chakravarti 2016). Tata Nano has been recorded to b the cheapest car in the world. This micro environmental factor has a key significance in the business of Tata Nano. Being the cheapest car, it is easily affordable by the various middle class people, with limited affordability (Charan and Dahiya 2015). The magical 100000 price tag was the greatest strength for the business case mentioned. Another micro-environmental factor is the competitors (Botti 2016). Tata Nano faced a strong competitive threat from various other cars. It faced direct competition from the affordable cars such as Maruti 800 and Maruti Suzuki Alto as well as Reva. It faced indirect competition from second hand cars that were much more affordable than the Tata Nano (Aschmoneit and Janevska 2013). The threat of substitutes such as two wheelers as well as metro railway and roadways are also strong in case of Tata Nano.
Along with the micro-environmental factors, the macro-environmental factors are also strong in case of Tata Nano. The key macro-environmental factors that affect the business of the Tata Nano are the economic factors, the demographic factors, the political factors, the technological factors as well as the social conditions (Hollensen 2015). The technical challenges that the car faced was a major factor that affected the business of Tata Nano (Chakravarti 2016). In the urge of building the world’s cheapest car, the technical complexities of the car was neglected, that affecting the popularity of the car (Shafiulla 2014). However, the economic factor was favourable in case of Tata Nano (Charan and Dahiya 2015). The economic stability along with the small size of the car, reduced the amount of road tax that had to be paid to the by the buyers of Tata Nano, thus, keeping the price in range of the middle-class people (Botti 2016). The production of the Tata Nano dropped abruptly as the availability of the cars in the showrooms reduced thus deflecting the potential customers. Moreover, the lack celebrity endorsement also affected the sale of the products adversely.
2.
References:
Aschmoneit, M. and Janevska, D., 2013. Closing the gap between frugal and reverse innovation: lessons learned from the case of the Tata Nano.
Botti, S., 2016. Book review: why people (don’t) buy: the GO and STOP signals by Amitav Chakravarti and Manoj Thomas. LSE Review of Books.
Chakravarti, A., 2016. Hit-or-miss strategies may be the reason why products flop. LSE Business Review.
Chakravarti, A. and Thomas, M., 2015. Tata Nano, the world’s cheapest car. In Why People (Don’t) BUY (pp. 63-72). Palgrave Macmillan UK.
Charan, A. and Dahiya, R., 2015. Digital Marketing and Consumer Behaviour: An Empirical Study in Indian Car Market with Special Reference to Delhi and NCR. Cluster Analysis of Young Online Consumers in Indian Context, p.60.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Kumar, G.S., 2014. Business Sustenance through Open Innovation at Tata Motors Limited. Projects (VEAS), 37(1), p.21.
Rothlin, S. and McCann, D., 2016. The Social Environment: Philanthropy. In International Business Ethics (pp. 365-389). Springer Berlin Heidelberg.
Shafiulla, B., 2014. Tata Nano to tata no-no. IUP Journal of Marketing Management, 13(1), p.78.
Singh, N. and Shalender, K., 2014. Success of Tata Nano through marketing flexibility: A SAP–LAP matrices and linkages approach. Global Journal of Flexible Systems Management, 2(15), pp.145-160.
Singh, S. and Joshi, M., 2015. New Market Creation via Innovation: A Study on Tata Nano.
Tybout, A.M. and Tybout, A.M., 2017. Trend Micro (A): Responding to a Service Failure. Kellogg School of Management Cases, pp.1-2.
Tybout, A.M., Fahey, N., and Bridgette, B., 2017. Marketing the Nissan Micra and Tata Nano Using Social Media. Kellogg School of Management Cases, pp.1-12.
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