Cheap, Cheaper, Cheapest: the Assignment

Q1: What is the key to Logan’s low price?

The key of Logan’s low price is low costs. Materials and accessories that are used in the car are low-quality or old-fashioned. Production costs are lowered by producing in Romania at where labor rates and taxes .are lower. And also company benefit from economies of scale by manufacturing high volumes.

Logan’s targeted lower-income customers. Moreover, as Logan offers a medium-level quality with a cheaper price than its competitors; it is a “good-value pricing strategy”.

Q2: What are the environmental implications of millions of middle-class consumers in emerging markets buying their first automobile?

Millions of middle-class consumers in emerging markets were buying their first automobile. However, not only in emerging markets; but also in European markets, consumers preferred low-cost cars because of the financial crisis.

There are some disadvantages of this situation. Because every people can buy car, traffic becomes more crowded especially in some countries such as India where has already congested roads. This increase causes not only traffic jam but also air pollution. And if we consider the whole picture, air pollution causes the pollution of water and so on. All of these pollutions will affect people’s health and moreover; when we consider psychologically; traffic jam may cause negative psychological cases such as stress and unhappiness.

To sum, when we consider micro-environmentally, the increase of cars will cause traffic jam, pollution and negative psychological cases. And when we consider this situation as macro-environmentally this pollution will also affect the world.

Q3: Do you think Tata will be able to save the Nano? What steps should the company take?

Tata introduced Nano at the price of $2500. And the target market in emerging markets is consumers who currently travel by scooter. Moreover, Tata supported the consumption with the idea of “also low income people have the right of the freedom that...