31 August 2015 14:00:11 IST

Nano needs to be smart, not just awesome

The interior of the Tata Group's newly launched "Nano" car is seen at the 9th Auto Expo in New Delhi January 11, 2008. Two wheeler prices are likely to slide and banks' car loan portfolios are set to rise from October when millions of consumers start buying the world's cheapest car, the "Nano", made by Tata Motors, a survey said on Friday. REUTERS/Vijay Mathur (INDIA)

The current association with ‘awesomeness’ tries to address this problem by relating the self-concept of ‘awesomeness’ of Nano buyers with the brand personality

Every brand has a brand personality which implies a mix of human characteristics which one can associate with the brand. Along the same lines, every person has a self-concept, that is, the way an individual views himself or herself. It has been observed in certain brands that people buy brands for which there is a strong correlation between brand personality and self-concept. But at the same time people are also affected by others' self-concepts (how people want others to view them). The reason why the initial positioning of Tata Nano as the people’s car failed was because in publicly consumed products such as cars, people value others’ self-concept more than their own. Ironically, the strong initial positioning of Nano as a product for the common man, which can also be inferred from its initial advertisements, led people to view it as a compromise in purchase rather than an upgradation from a two wheeler.

A question may be regarding the high initial adoption of Nano by consumers and the spikes in sales in between. To address this issue we look at how people learn and how it impacts the way products sell. There are two kinds of learning that happen, individual learning (e.g. from media) and social learning (learning by seeing others behaviour around us which is related to the others' self-concept discussed before). The rate of adoption versus time curve for Nano cars strongly emulates the curve for situations where individual learning is quite high but social learning is low.

In such cases, individual learning being high, the rate of adoption initially increases quickly as people get to know about the product from the media and other PR activities, which was also seen through the high pre-bookings of Nano. But as social learning in the case of Nano was weak, because of a perception of compromise in the purchase of a common man's car, the high rate of adoption could not be sustained. There can be spikes in rates of adoption in between as and when the company repositions its brand and does heavy promotion and advertisement. This, again, happens because individual learning increases during these times.

Thus, we can infer that if the Nano wants to have a sustainable high rate of adoption it needs to work on the social learning aspect, which also means it needs to work upon how others view the people who buy the Nano.

The current association with ‘awesomeness’ tries to address this problem by relating the self-concept of ‘awesomeness’ of Nano buyers with the ‘awesome’ brand personality of the car which is a manufacturing wonder. The expectation is that this positioning will also help to create a positive others’ self-concept unlike the earlier positioning of ‘a common man’s car’. This can be a move in the right direction but there is a problem with this association. We cannot ignore the fact that a strong brand association of a low-cost car has already been established. It is very difficult to erase these associations by superimposing a completely new and, in fact, contradictory association of ‘awesomeness’ in the minds of customers. A better option would be to build upon the current brand associations in such a way so that the negative factor associated with the choice of a low-cost cars becomes positive. A positioning that would fit this purpose is not an ‘awesome choice’ but a ‘smarter choice’: a smarter choice over an unsafe two-wheeler, a smarter choice over other entry-level cars in the market. Use the attributes where Nano stands better than other entry-level cars for this purpose.

A similar comparison between a scooter and Nano was made in the initial Nano advertisements. The person on the scooter was shown aspiring for a four-wheeler. Now we want to show the same subject making a smarter choice by choosing the Nano over a two-wheeler. Similar successful positioning was achieved by Southwest Airlines (SWA) through its ‘Smart Campaign’. SWA made people reflect how they make smart choices in their lives and so should they make the smart choice of choosing the low-cost but efficient SWA over other airlines. Like SWA, if we look at the need spaces then there is certainly a clear gap which Nano fills. The hindrance to Nano’s adoption has been social factors rather than the product itself. Its positioning as a ‘smart choice’ can help the Nano overcome these social factors against it.

(Ashok Rawat and Harshit Gupta are pursuing PGP in management from IIM Ahmedabad)