31 August 2015 13:40:52 IST

Target buyers of a second car

The new positioning of Tata’s novel product Nano as a youth brand with their campaign “Awesomeness Unveiled” aims to boost its sales by offering it in different colours, a cool design and the lowest price. The targeted buyer is a tier-1/2 dwelling youth with sufficient disposable income. This segment can be further sub-segmented into the price-conscious ones and the individuals who have high money availability. Going by the current campaign, positioning and brand perception of Nano, it might fail to attract buyers from both these sub-segments.

The first group would prefer a car they can keep for long term (6-7 years) where it could double as a family car and with several easy financing options available, such customers would preferably choose competitors such as Alto 800 or Hyundai Eon. Additionally, they could also go for a second-hand car priced almost at par or less than the Nano and providing an opportunity to own a car of higher configuration at lower cost, often backed by firms like Maruti Suzuki themselves.

The latter segment would like to have a premium brand image and go for higher-end cars. They would not be content with what Nano provides. The only avenues left for Nano in the youth segment might be the first-time buyers dwelling in busy cities or those who are buying a second car for their wives or kids at high-school.

Other Strategies Marketing Campaign based on USP of Manoeuvreability : Tata Nano has the lowest minimum turning radius among Indian cars which is at 4 m. This allows it to navigate easily in traffic jams. Parking is also easier with a small car like Nano. This should come out clearly in future marketing communications of Nano. Tata should also work on further reducing the turn radius in its future versions of the car so that the USP is not easily overcome by other competitors like Maruti.

Launching a Tata-Nano Electric Version : Tata should develop an electric hybrid or a purely electric version of Nano. As Nano is already perceived to eco-friendly with a small carbon footprint and has efficient mileage, this will appeal especially to the segment of the population whose motto is ‘go green’. This will have significant takers in countries with strong environment movement and environmental parties like Germany, Sweden etc. It will also fit in well with Tata Nano’s image of convenience and ease of use for city driving.

Launching in Overseas Markets : Tata Nano also has huge potential in overseas markets where car ownership and prices of cars are relatively high like the US, New Zealand, Australia and Western Europe. As Nano already meets Euro4 emission standards and international safety standards, regulatory approvals will be much easier to get. The assembly line for the International Nano should be placed closer to the market and preferably in a European country like the UK. Tata is already operating factories for its Jaguar and Landrover lines here. Doing this would lead to lower shipment costs and the car’s brand image would also get a facelift.

Target Second-Car Buyers Second car buyers will generally prefer Nano mainly because of its affordability and the features available at that price point. The potential hurdles for such a purchase would be worries about potential re-sale value and brand positioning of the car. Tata should set up exchange centres or partner with existing distributors for taking in older Nano cars for the newer versions.

(The writers are pursuing PGP in management from IIM, Ahmedabad)