An article in the Economist last week caught my attention. It talked about marketing strategies gone awry. Tata group have identified the need to "get poor Indians off the motor bikes and into shiny new cars they could buy for 1 lakh (100,000) rupees, or about $2,200". While the concept of the Nano car was sound, Tata's marketing strategy wasn't. It failed to take into account its target market; rural living, low-income Indians.
Targeting low-income Indians meant Tata must position its Nano in the lower price range to enable its target market to afford buying the car. Tata's positioned the Nano as an affordable car, thus emphasising on its cheapness. However, as production cost rises, the Nano is no longer affordable for Tata's initial target market. Its emphasis on cheapness has become a double-edged sword for the Nano. The poor cannot afford it, yet the slightly better off will not buy it.
The article shows the importance of well researched, sound marketing strategies and product positioning. A company with an excellent product concept such as Tata's Nano can fail due to hasty positioning strategies. Tata must take a step back and re-think its marketing strategies in order to revive the Nano.
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