Tata Nano

At present, the most important goal for Tata is to increase sales of Nano’s/month to 12,000 within the next 6 months. In order to achieve this goal, our marketing strategy will strive to persuade college students to buy the Tata Nano over competitors’ cars because of its style and maneuverability.

The main impediment to achieving this goal is we do not have abundant market research to validate what college students find most important in a car (i.e., what our differentiator should be).

The best solution for overcoming the impediment is to build a strong marketing and advertising campaign communicating to college students and their parents that the Nano is far superior to the competitors’ cars in both its style and maneuverability. Those are the two areas we believe are important to students based on the case.

Problem Analysis

Increasing the number of cars sold to 12,000 units/month by June of 2011 is the most appropriate goal at this point. Sales peaked at 9,000 cars/month in July 2010, after safety concerns and rising raw material costs, sales dipped to 509 units/month, then rebounded to 5,784 units by December after safety concerns were addressed. To achieve manufacturing efficiency at the Sanand Plant they will have to produce close to capacity. The capacity of the Sanand Plant is 250,000 cars/year (20,800 cars/month). Full sales distribution will be in place as of January 2011 thus achieving the goal of 33% growth in 6 months; although a stretch is realistic knowing that car sales grew 22% in one month back in November of 2010. More aggressive growth will be pursued in the future.

Growing the number of units sold is more important than profitability as for with emerging products it is critical to establish a foothold by selling the volume that begins to convince buyers that the Nano should be their car of choice. After volume is achieved focusing on profitability will be important to assure long-term health of the product line.

Based on Nano sales...