Tata Nano Pricing Strategy Marketing Essay

India country is the one part of the BRIC and also poorest country. They have many populations in their country and 65 million of the people are riding motorbikes. Therefore, most of the people are died by causing a lot of accidents. Motorbikes can ride just 3 people, but they ride more than 3 people and then they got some accidents. Nowadays, the largest industrial company of Tata Nano, covered that problem by producing Tata Nano’s cheapest cars or people’s car in the world. The price for Tata Nano base model is Rs.1,35,151 and, the price for CX and LX are Rs. 1,64,481 and Rs. 1,86,498. Those cars price is not much different from that of the scooters’. The cars have the engine at the rear which is 624cc and no air-conditioner. Their cars lengths, widths and height are 3.1 meters, 1.5 meters and 1.6 meters. Therefore, at least 4 or 5 people can ride. They will sell not only in their country but also in developing countries and developed countries.

Tata Nano pricing strategy

This company especially targets to the middle class people who do not afford to buy a car [1] . Most people from India want to ride a car which is not expensive. On the other hand, they want to solve the problem of dangerous accidents which could die easily when they ride a scooter. Therefore, they use the Market-Penetration pricing [2] . By using this strategy, they can penetrate more market and know how to get large market place. The large amounts of customers are attracted by Tata Nano cars’ price. Therefore they can get more market place in India and developing countries. For example(Dell used penetration pricing to enter the personal computer market, selling high-quality computer products through lower -cost direct channels) [3] . According to this strategy, firstly, most Indians will happy with that opportunity. Reduce dangerous accident. It may affect their company’s image because they are producing the cheapest cars in the world and at first, and people might think that their products are unqualified as it is cheap.

Task 2 Tata Nano’s new market strategies

The company need to do analysis about marketplace and customer needs and wants, design a customer-driven marketing strategy, construct your market or strategy by 4ps. [4] 

4ps

Product

Price

Promotion

Place (distribution)

For a Tata Nano company they are the largest industrial company in India. [5] Therefore they have a large market in India country. Now they produce a new product. And they want to launch their product to Europe. If they launch their products to Europe they may need to know Europe’s environmental issues because they can’t control the Macro-Environment such as political-legal factors, Economic environment, Social cultural environment, technological environment and natural environment [6] .

Political legal factors [7] 

It consists of laws, regulations and government agencies and limits various organizations and individuals in a given society. In spite of them, law can cause all aspects of marketing decision making such as designing, pricing, distribution and advertising.

Economic environment [8] 

In this title the most important point is the customers. Its means if there is no customer, there is no economic. Therefore we need to attract the customers. Therefore a marketer must pay attention to close with major trend and customer spending patterns. And then may use customer-driven marketing strategy.

Social-cultural environment [9] 

Social-cultural environment is defining the population in terms of density, size, age, gender, location and so on. In different cultural and social environment have attitudes and beliefs.

Technological environment [10] 

In digital age technology is the most important part in humans’ life therefore it takes a place in economic environment. Technology is perhaps the most dramatic force shaping the marketing environment.

Natural environment [11] 

Natural things or raw materials, these are support to marketers or marketing activities.

Before they analysis the macro-environment, company must to know their internal factors, which contains marketing objective, marketing mix strategy, cost, organizational considerations. Marketing objective is meaning they must answer their self by ‘W,H’ questions example, “what we want?” after answered those questions, select the target market and take position carefully in that target market. And then, think about the price but it will be fairly straightforward. During that time, the company may seek the objects which are specific. [12] For example (when Honda and Toyota decided to develop their Acura and Lexus brand to compete with European Luxury-performance cars in the higher-income segment, this required charging a high price. In contrast, Motel 6, EconoLodge, and Red Roof Inn have positioned themselves as motels that provide economical rooms for budget- minded travelers) [13] the marketing objective is also one part of the important segment because, if you don’t know what you want, the future will be bad. On the other hand, managerial skills, organizational strengths and weaknesses and cost structures [14] are also important part in internal factors.

Pricing decisions [15] 

Other marketing mix variables

costs

Pricing objective

Organizational and marketing objective

After maintain the

Price

Perceived value for money

Legal regulatory issues

competitions

Buyers’ perceptions

Channel member expectations

After maintained the internal factors, the company has to know about external factors which consist of market and demand (it means, relationship between price and demand both are base on company’s products. Company has to know, not only customer’s likes but also how many demand are there. [16] ) They can focus the future due to knowing about internal and external factors. As for Tata Nano Company in European countries, before they launch their products, they may analysis the demand, external factors and macro-environment from the European countries. After all these objectives they may using with same price in Europe when they selling. Because, some of the rich countries in Europe, there have many competitors, therefore they may do differentiation strategy. It is meaning make the strategies, which strategies cannot be done by others competitors. Due to use this strategy the company will has a distinct advantage [17] .

Therefore Tata Nano Company may sell their cars with same price in European countries because their cars cost are the cheapest in the world. So other competitor cannot put their price immediately in Europe. During that time Tata Nano may target to familiar countries and developing countries such as

This is because; they don’t need to invest more time research for social-culture environment in those countries. Due to targeting those countries, they can save the time and get more market share or market place than other competitors. In Europe countries Tata may use marketing concept which is make achieve to get organizational goals [18] . So Tata may target lower lowers class to Middle class with same prices in Europe.

4

Before Tata penetrate to Europe, they would do SWOT analysis tools and then they will get the opportunities by using SWOT analysis tools. Therefore following titles will show about Tata, when they were analysis.

Strengths

Weakness

Opportunities

Threats

If they launch their products in Europe, also they need the SWOT analysis of those countries. For example, Tata sent their products in Malaysia; they did analysis about the Malaysia’s tradition and market places. Such as

Strengths

Weakness

Opportunities

Threats

Therefore, if Tata export their product in Europe and USA, they may divide in two types of countries, developed countries (such as England) and developing countries such as Malaysia.

Diversified growth in Developed countries

For those countries, Tata may use conglomerate diversification because, the developed countries have well technology and many products. Therefore, if Tata export their peoples’ car in developed countries which are consist of Europe, they may advertise their products with effectively such as advertise on TV, advertise on online, advertise on radio, advertise on journals and magazines and so on. For example (Bass, the British brewer and pubs business, acquired the American Holiday inn hotel chain. Laura Ashley, the UK clothing and Furnishings Company, moved into the fragrance market with Laura Ashley [19] .)