“Study on Consumer behavior at Tata Motors for Nano”

INTRODUCTION1

Introduction

Consumer behaviour is the study of individuals, groups, or organizations and the processes

they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy

needs and the impacts that these processes have on the consumer and society. [1] It blends

elements from psychology, sociology, social anthropology and economics. It attempts to

understand the decision-making processes of buyers, both individually and in groups. It

studies characteristics of individual consumers such as demographics and behavioural

variables in an attempt to understand people's wants. It also tries to assess influences on the

consumer from groups such as family, friends, reference groups, and society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer

playing the three distinct roles of user, payer and buyer. Research has shown that consumer

behaviour is difficult to predict, even for experts in the field.[2] Relationship marketing is an

influential asset for customer behaviour analysis as it has a keen interest in the re-discovery

of the true meaning of marketing through the re-affirmation of the importance of the

customer or buyer. A greater importance is also placed on consumer retention, customer

relationship management, personalisation, customisation and one-to-one marketing. Social

functions can be categorized into social choice and welfare functions.

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Each method for vote counting is assumed as social function but if Arrow’s possibility

theorem is used for a social function, social welfare function is achieved. Some

specifications of the social functions are decisiveness, neutrality, anonymity, monotonicity,

unanimity, homogeneity and weak and strong Pareto optimality. No social choice function

meets these requirements in an ordinal scale simultaneously. The most important

characteristic of a social function is identification of the interactive effect of alternatives and

creating a logical relation with the ranks. Marketing provides services in order to satisfy

customers. With that in mind, the productive system is considered from its beginning at the

production level, to the end of the cycle, the consumer

Black box model

ENVIRONMENTAL FACTORS BUYER'S BLACK BOXBUYER'S

RESPONSE

Marketing

Stimuli

Environmental

Stimuli

Buyer

CharacteristicsDecision Process

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Demographic

Natural

Attitudes

Motivation

Perceptions

Personality

Lifestyle

Knowledge

Problem

recognition

Information

search

Alternative

evaluation

Purchase decision

Post-purchase

behaviour

Product choice

Brand choice

Dealer choice

Purchase

timing

Purchase

amount

The black box model shows the interaction of stimuli, consumer characteristics, decision

process and consumer responses.[3] It can be distinguished between interpersonal stimuli

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(between people) or intrapersonal stimuli (within people).[4] The black box model is related

to the black box theory of behaviourism, where the focus is not set on the processes inside a

consumer, but the relation between the stimuli and the response of the consumer. The

marketing stimuli are planned and processed by the companies, whereas the environmental

stimulus are given by social factors, based on the economical, political and cultural

circumstances of a society. The buyers black box contains the buyer characteristics and the

decision process, which determines the buyers response.

The black box model considers the buyers response as a result of a conscious, rational

decision process, in which it is assumed that the buyer has recognized the problem.

However, in reality many decisions are not made in awareness of a determined problem by

the consumer.

Information search

Once the consumer has recognised a problem, they search for information on products and

services that can solve that problem. Belch and Belch (2007) explain that consumers

undertake both an internal (memory) and an external search.

Sources of information include:

Personal sources

Commercial sources

Public sources

Personal experience

The relevant internal psychological process that is associated with information search is

perception. Perception is defined as "the process by which an individual receives, selects,

organises, and interprets information to create a meaningful picture of the world".

Consumers' tendency to search for information on goods and services makes it possible for

researchers to forecast the purchasing plans of consumers using brief descriptions of the

products of interest.[5]

The selective perception process

Stage Description

Selective exposure consumers select which promotional messages they will expose

themselves to.

Selective attention consumers select which promotional messages they will pay

attention to.

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Selective comprehension consumer interpret messages in line with their beliefs,

attitudes, motives and experiences.

Selective retention consumers remember messages that are more meaningful or

important to them.

The implications of this process help develop an effective promotional strategy, and select

which sources of information are more effective for the brand.

Evaluation of alternatives

At this time the consumer compares the brands and products that are in their evoked set. The

evoked set refers to the number of alternatives that are considered by consumers during the

problem-solving process. Sometimes also known as consideration , this set tends to be small

relative to the total number of options available. How can the marketing organisation

increase the likelihood that their brand is part of the consumer's evoked set? Consumers

evaluate alternatives in terms of the functional and psychological benefits that they offer.

The marketing organisation needs to understand what benefits consumers are seeking and

therefore which attributes are most important in terms of making a decision. It also needs to

check other brands of the customer’s consideration set to prepare the right plan for its own

brand.

Purchase decision

Once the alternatives have been evaluated, the consumer is ready to make a purchase

decision. Sometimes purchase intention does not result in an actual purchase. The marketing

organisation must facilitate the consumer to act on their purchase intention. The

organisation can use a variety of techniques to achieve this. The provision of credit or

payment terms may encourage purchase, or a sales promotion such as the opportunity to

receive a premium or enter a competition may provide an incentive to buy now. The

relevant internal psychological process that is associated with purchase decision is

integration. Once the integration is achieved, the organisation can influence the purchase

decisions much more easily.

There are 5 stages of a consumer buying process [6] they are: The problem recognition stage,

meaning the identification of something a consumer needs. The search for information,

which means you search your knowledge bases or external knowledge sources for

information on the product. The possibility of alternative options, meaning whether there is

another better or cheaper product available. The choice to purchase the product and then

finally the actual purchase of the product.[6] This shows the complete process that a 5

consumer will most likely, whether recognisably or not, go through when they go to buy a

product.

Postpurchase evaluation

The EKB (Engel, Kollat, Blackwell) model was further developed by Rice (1993) which

suggested there should be a feedback loop, Foxall (2005) further suggests the importance of

the post purchase evaluation and that it is key because of its influences on future purchase

patterns.

Other influences

Consumer behaviour is influenced by internal conditions such as demographics,

psychographics (lifestyle)sadam , personality, motivation, knowledge, attitudes, beliefs, and

feelings. Psychological factors include an individuals motivation, perception, attitude and

belief, while personal factors include income level, personality, age, occupation and

lifestyle.

Congruence between personality and the way a persuasive message is framed (i.e., aligning

the message framing with the recipient’s personality profile) may play an important role in

ensuring the success of that message. In a recent experiment, five advertisements (each

designed to target one of the five major trait domains of human personality) were

constructed for a single product. The results demonstrated that advertisements were

evaluated more positively the more they cohered with participants’ dispositional motives. [7]

Tailoring persuasive messages to the personality traits of the targeted audience can be an

effective way of enhancing the messages’ impact.

Behaviour can also be affected by external influences, such as culture, sub-culture, locality,

royalty, ethnicity, family, social class, past experience reference groups, lifestyle, market

mix factors.

Tata Motors, also listed in the New York Stock Exchange (September 2004), has emerged

as an international automobile company. Through subsidiaries and associate companies,

Tata Motors has operations in the UK, South Korea, Thailand, Spain, South Africa and

Indonesia. Among them is Jaguar Land Rover, acquired in 2008. In 2004, it acquired the

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Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The

rechristened Tata Daewoo Commercial Vehicles Company has launched several new

products in the Korean market, while also exporting these products to several international

markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are

from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a

reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009.

Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a

51:49 joint venture with the Brazil-based, Marcopolo, a global leader in body-building for

buses and coaches to manufacture fully-built buses and coaches for India - the plant is

located in Dharwad. In 2006, Tata Motors entered into joint venture with Thonburi

Automotive Assembly Plant Company of Thailand to manufacture and market the

company's pickup vehicles in Thailand, and entered the market in 2008. Tata Motors (SA)

(Proprietary) Ltd., Tata Motors' joint venture with Tata Africa Holding (Pty) Ltd. set up in

2011, has an assembly plant in Rosslyn, north of Pretoria. The plant can assemble, semi

knocked down (SKD) kits, light, medium and heavy commercial vehicles ranging from 4

tonnes to 50 tonnes.

Tata Motors is also expanding its international footprint, established through exports since

1961. The company's commercial and passenger vehicles are already being marketed in

several countries in Europe, Africa, the Middle East, South East Asia, South Asia, South

America, CIS and Russia. It has franchisee/joint venture assembly operations in

Bangladesh, Ukraine, and Senegal.

The foundation of the company's growth over the last 66 years is a deep understanding of

economic stimuli and customer needs, and the ability to translate them into customer-

desired offerings through leading edge R&D. With over 4,500 engineers, scientists and

technicians the company's Engineering Research Centre, established in 1966, has enabled 7

pioneering technologies and products. The company today has R&D centres in Pune,

Jamshedpur, Lucknow, Dharwad in India, and in South Korea, Spain, and the UK.

It was Tata Motors, which launched the first indigenously developed Light Commercial

Vehicle in 1986. In 2005, Tata Motors created a new segment by launching the Tata Ace,

India's first indigenously developed mini-truck. In 2009, the company launched its globally

benchmarked Prima range of trucks and in 2012 the Ultra range of international standard

light commercial vehicles. In their power, speed, carrying capacity, operating economy and

trims, they will introduce new benchmarks in India and match the best in the world in

performance at a lower life-cycle cost.

Tata Motors also introduced India's first Sports Utility Vehicle in 1991 and, in 1998, the

Tata Indica, India's first fully indigenous passenger car.

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano. The Tata Nano has

been subsequently launched, as planned, in India in March 2009, and subsequently in 2011

in Nepal and Sri Lanka. A development, which signifies a first for the global automobile

industry, the Nano brings the joy of a car within the reach of thousands of families.

Tata Motors is equally focussed on environment-friendly technologies in emissions and

alternative fuels. It has developed electric and hybrid vehicles both for personal and public

transportation. It has also been implementing several environment-friendly technologies in

manufacturing processes, significantly enhancing resource conservation.

Through its subsidiaries, the company is engaged in engineering and automotive solutions, 

automotive vehicle components manufacturing and supply chain activities, vehicle

financing, and machine tools and factory automation solutions.

Tata Motors is committed to improving the quality of life of communities by working on

four thrust areas - employability, education, health and environment. The activities touch the

lives of more than a million citizens. The company's support on education and employability 8

is focused on youth and women. They range from schools to technical education institutes to

actual facilitation of income generation. In health, the company's intervention is in both

preventive and curative health care. The goal of environment protection is achieved through

tree plantation, conserving water and creating new water bodies and, last but not the least,

by introducing appropriate technologies in vehicles and operations for constantly enhancing

environment care.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

History of Tata Nano

After having successfully launched the low cost Tata Ace truck in 2005, Tata Motors began

development of an affordable car that would appeal to the many Indians who drive

motorcycles.[4] The purchase price of this no frills auto was brought down by dispensing

with most nonessential features, reducing the amount of steel used in its construction, and

relying on low cost Indian labor, as well as a new design concept called Frugal Engineering. [5]

“Frugal Engineering” was a term coined in 2006 by Renault Chief Executive Carlos Ghosen

to describe the design process behind the Tata Nano. This type of design concept was

designed to better the those at the bottom of the pyramid. [6] However, “A Study on

Consumer Perceptions & Expectations for Tata Nano” shows that the bottom of the pyramid

is not very aware of what they are getting when purchasing a Tata Nano. [7] While that paper

may seem to focus on the Indian contribution, the Nano was a truly international effort.

“Tata turned to Germany’s Bosch for a new engine-management system; Italy’s I.D. E. A.

Institute and Trilix for styling and exterior design; India’s Sona Koyo for lightweight

steering shafts; America’s Johnson Controls for the seating system; Japan’s Toyo for the

engine-cooling Germany’s Behr for the heating, ventilating, and air-conditioning system;

and India’s Madras Rubber Factory for tougher than normal rear tires.” [8] So to call it the

Indian Car is understandable, but misleading. The Nano is an excellent example of LAPD.

The "LAPD (lean principle applied product development) process is implemented with

utilization of external sources of knowledge and utilization of the digital technology that

support the product development process in order to complement the weakness of

technological capability." [9] While the Nano is engineerd from the bottom up, the existing

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economies of scale from other manufactures are not to be ignored. For the Nano, Tata

motors chose to "outsource 85% of the Nano’s components and use 60% fewer vendors than

normal to reduce transaction costs and achieve better economies of scale".[10]

The introduction of the Nano received much media attention due to its low price.

Expectations and effects

Expectations created for the car during the run up to its production may have been out of

proportion with its realized success. A 2008 study, by Indian rating agency CRISIL, thought

the Nano would expand the nation's car market by 65%,[12] but, as of late 2012, news reports

have detailed the underwhelming response of the Indian consumer to the offering; sales in

the first two fiscal years after the car's unveiling remained steady at about 70,000 units

although Tata appears intent on maintaining a capacity to produce the car in much larger

quantities, some 250,000 per year, should the need arise.[13]

It was anticipated that its 2009 debut would greatly affect the used car market, and prices

did drop 25-30% prior to the launch.[14] Sales of the Nano's nearest competitor, the Maruti

800, fell by 20% immediately following the unveiling of the Nano.[15] It is unknown if the

Nano has had a lasting effect on the prices of and demand for close substitutes, however. In

July 2012, Tata Group Chairman, Ratan Tata, said that the car has immense potential in the

developing world while admitting that early opportunities were wasted due to initial

problems.[

Singur factory pullout

Tata Motors announced in 2006 that the Nano would be manufactured in Singur, West

Bengal.[17] Local farmers soon began protesting the forced acquisition of their land the new

factory entailed.[17] Tata first delayed the Nano launch and later decided to build the car in a

different state, Gujarat, instead.

Gujarat Factory Controversy

The plant was moved to Gujarat after the controversy in Singur. The Gujarat plant came

under severe criticism from sections of society, due to a large amount of soft-loan offered

by the Gujarat government. The Gujarat government offered a loan of Rs. 9570 Crores, with

a meagre interest rate of 0.1% and with the loan to be paid back in 20 years. The

government also promised to build a four-lane road and give exemption on electricity duty,

registration and transfer charges of land. The government also promised to put up a waste

disposal plant, supply natural gas through a pipeline and provide 100 acres near Ahmedabad

for a township. [19]

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The opposition parties alleged mass corruption in the project. The opposition is also

claiming that the project is actually heavily subsidied by the people to the tune of Rs. 60,000

per car, which is more than half of the initial offer price of the car. [20] This subsidization

comes in many forms. The farmers who agreed to lease their land to Tata motors found out

afterward that they would not receive any compensation. The land that government sold to

the company was done so for under half of its market value. This is where the savings lie. [21]

This is just another example of a developing country (or in this case, a state), paying

incentives which are too high in the hopes of landing some investment. The conservative

estimates start at 800 million $US, which is more than Tata's investment.

Price

Announced as the least expensive production car in the world, Tata aimed for a price of one

lakh rupees, or 100,000, which was approximately $2,000 US at the time.[23] Only the very

first customers were able to purchase the car at that price, however, and, as of 2012, the

price for the basic Nano is around 150,000.[24] Increasing material costs may be to blame

for this rapid rise in price.[25]

Compared to the Volkswagen Beetle it has a relatively low price, however. In 1990, a

Beetle from Mexican factories was priced at $5,300,[26] about $9,428 in today's money. The

Ford Model T's initial price was about $850, equivalent to $21,987 today.

Cost-cutting features

The Nano's design implements many measures that make its manufacture cheap.

The Nano's trunk is only accessible from inside the car, as the rear hatch does not

open.[28]

One windscreen wiper instead of the usual pair (also seen earlier on certain Citroen

and Mercedes models) [11]

No power steering, unnecessary due to its light weight[11]

Three lug nuts on the wheels instead of the usual four (also seen on Smart) [29]

Only one wing mirror [11]

Radio or CD player is optional (the idea picked on some basic car models in North

America) [11]

No airbags on any model [30]

624cc rear engine has only 2 cylinders (recently implemented in new Fiat 500, with

a surcharge) [11]

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No air conditioning in base model (as on most basic car models in Europe and North

America)

Tata Nano 800

There are reports for a larger capacity Tata Nano, the car will feature an 800cc engine and

will compete with the segment topper Maruti Suzuki Alto 800. Most probably the car will

be launched by 2013-end and it will have a competitive price tag of around Rs. 2.5 lakh.

The 800 version will be the last among the three upgraded versions of Nano, while other

two Tata Nano Diesel and Nano CNG will be launched shortly.

Technical specifications

The Nano (2012) is a 38 PS (28 kW; 37 hp) car with a two-cylinder 624 cc rear engine.

The car complies with BS4 Indian emission standards and can also meet European emission

standards as well.

The development of the Nano had led to 31 Design and 37 Technology patents being filed

Radical powerplants

While the Nano is driven by a petrol engine, several more-radical powerplants have been

proposed but not put into production. Also, an upscale version was shown at an autoshow.

Compressed-air engine

Tata Motors signed an agreement in 2007 with a French firm, Motor Development

International, to produce a compressed air car Nano.[36] While the vehicle was supposed to

be able to travel approximately 200 kilometres (120 mi) on $3 US of electricity to compress

the air, Tata's Vice President of Engineering Systems confirmed in late 2009 that vehicle

range continues to be a problem.

Diesel

A website has speculated that the Nano might be made available with a diesel engine.[38]

Tata Motors have not confirmed this but have stated: "As of now there is no Diesel variant

of the Nano. The Nano is only available in a Petrol version."

Electric vehicle

Tata has discussed the possibility of producing an electric version,[40] and while it showcased

an electric vehicle Nano at the 2010 Geneva Motor Show,[41] no such car is currently on the

market.

If an EV Nano is sold it is expected to be the "world's cheapest electric car",[42] use lithium-

ion batteries, and have a range of 80 miles (130 km).[43] A Norwegian electric car specialist,

Miljøbil Grenland AS, has been named as a supposed partner in the project.[40]

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European export

An upscale Nano concept car called the Europa was shown at the 2009 Geneva Motor

Show.

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LITERATURE REVIEW

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LITERATURE REVIEW

Article 1 :What gave Nano a headstart ? The Nano could potentially challenge the conventional wisdom within the auto industry that wholly new concepts do not live long enough. New launches basically add a whistle here and a bell there to the plethora of existing models. Indeed, in more than 70 car launches worldwide, there have been not more than a handful of seminal shifts within this industry. But the Tata offering has come to topple all those casts by reordering the status-quo. The whole story seems to strike two notes at once. The first one is true to the old adage among businesses that the wise profit from giving that which profits their customers; the second dares to contrarily create and nurture a space that others overlooked or even rejected. Some known facts Not too long ago, many pundits within the industry had held that small cars such as the Maruti 800 have outlived their use and must, therefore, pack up. Yet, just into 2008, a glowing Mr. Ratan Tata drove on to the stage in his Nano, that sports a far lower powered engine and which may soon storm the Indian roads. Surprisingly, many of the same pundits who had bemoaned the twilight of Maruti 800 have now begun to celebrate the business sense that the Nano exudes. It looks like, in any case, the Tata Nano project has defied textbook constructs of successful venturing. In fact, we knew for good reasons that there is much less money to be made in small cars. We also knew that products conceived for specific markets have less possibility of success than those visualized on a global basis. And, admittedly, auto majors with a wider, deeper portfolio of cars are rightly believed to be able to gain more profitably from a radical but relevant offering. Such manufacturers, it is often acknowledged, are able to reap from the economies of scale that can be got from sharing the costs of design, manufacture and retail, among their entire product line-up. Small-car concept The Tata project bore none of the above usual stamps of success. Yet it is pretty hard to term Nano anything but a success going by the reception it received. This perhaps indicates that the real game is one of strategy. Indeed, it is not so much about cars or of experience as about getting clear the underlying concepts and attitudes. Ironically, Tata's capture of the "small car concept" is in itself hardly path-breaking.

Small-car concept

The Tata project bore none of the above usual stamps of success. Yet it is pretty hard to

term Nano anything but a success going by the reception it received. This perhaps indicates

that the real game is one of strategy.

Indeed, it is not so much about cars or of experience as about getting clear the underlying

concepts and attitudes. Ironically, Tata’s capture of the “small car concept” is in itself

hardly path-breaking.

One recollects that when the Maruti 800 was introduced around the mid-1980s, it was, even after adjusting for the then stronger rupee, an immensely affordable car (well below a lakh of rupees). It was, in fact, India's first small, sweet car. But, over time, the sweetness of Maruti 800 - rather than the real demand for small cars - had diminished. That was primarily because of its price, which kept on surging. What is certainly path-breaking is the price tag of the Nano. Even if we went all the way

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back before all those price rises and income growth spread over the past two consecutive decades, Nano's price would have still generated a landslide sales record in the mid-1980s. The price element And, what is important is, where a pre-liberalised mid-1980s represented stunted buying power, "today's India" that is to receive the Nano, represents greatly enlarged buying power. This, in effect, gives the Nano an exceptional welcome thrust. Besides the element of price-point - where Tata Motors led the pack on a wide margin - almost every other major car company in the world seems to have otherwise just as seriously investigated small cars. If anything, notwithstanding the environment dimension, the persistently high oil prices of the present decade have, in fact, made all makers gravitate toward more fuel-efficient, smaller cars. The key question, then, is: With so many auto firms zeroing in on small cars, how did Tata Motors achieve such astounding price levels? Indeed, when global industry majors were talking about a small car with trendy, tiny engines, they were all, in effect, attempting to scale down on what they were traditionally good at: Medium and big cars. Two perspectives Unlike Tata Motors, almost none of the global majors had paid due attention to the thought of an all-new small car. There is, for sure, a big difference between scaling down a big-sized car to a viable small size. The gamut of idea generation, concept, design, making, retailing, and so on, differs a great deal between the two perspectives. The first perspective tweaks to fit what is already on hand, whereas the second creates afresh to fulfill what is widely sought. Consequently, the processes that colour the making of an inexpensive and cheerful car are not at all 'cheap'. Understandably, those processes have to be richer in innovation, bolder in imagination, nimbler in evaluating and, of course, shrewder in putting together the pieces (ideas, hardware, and costs) appealingly.

The stalwarts of the car industry never quite saw 'small cars' as 'small cars'. Here is where Tata Motors strode ahead, giving Mr. Tata and his team a head-start. The Nano, then, brings home the truth that lacking certain advantages can actually prove more rewarding. The car industry, unlike the insurance industry, which enjoys safety cover from reinsurance, has never been able to obtain a guaranteed cover for assured success. One could say that the future Nanos would certainly get their shots of incremental improvement. So, too, would be the approaches of many other aspiring small-car makers, after taking note of this primordial shift. # Source : The Hindu Business Line — February 5th, 2008

Article 2: Tata to ride Nano to Geneva Motor Show Tata Motors' Nano, easily the world's most talked-about car these days, will make its international debut at the 78th Geneva Motor Show in the first week of March. The five-door hatchback that costs just Rs 100,000 ($2,500), making it the world's cheapest, was unveiled in January this year at the Auto Expo here. Nano would be among Tata Motors' exhibits at the show, a company spokesperson said here. Sales of Nano, nicknamed the people's car for its affordable pricing that will make four-wheelers available to millions of middle-class people who hitherto rode two-wheelers, is expected to start in the second half of this year. Although the car has its share of critics, it has undeniably put India on the global automotive map and has triggered a race among leading car makers to match the Nano price-point. Already, car manufacturers Renault and Nissan are eyeing a $3000 car. The Nano, which Tata Motors has said meets all safety and emission norms, will share the limelight with top marques from around the world that are expected at the show. This year's edition of the Geneva Motor Show will mark the 11th year of participation for Tata Motors. Tata Motors' Nano, easily the world's most talked-about car these days, will make its international debut at the 78th Geneva Motor Show in the first week of March. # Source :The Economic Times — February 7th, 2008

Article 3: Indian people's car India is one of those developing countries whose economies are expected to be among the world leaders by the middle of this century. Its technological skill and financial clout have already made an

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impact in the IT industry and the international cricketing arena, to take just two examples. But the unveiling of Tata Motors' Nano car in New Delhi yesterday

The headline news is that the Nano will cost only pounds 1,300, thus opening a potentially huge market in the developing world. But Tata has also stolen a march on giant vehicle manufacturers such as GM, Ford, Toyota, V W, Mitsubishi and Renault-Nissan, all of which are looking to expand sales in Asia, Africa and Latin America at a time when the European and American markets are, respectively, flat and declining. Tata has produced a car that not only costs pounds 500 less than the cheapest Chinese model, but also breaks technological ground by having a rear-mounted two-cylinder engine, which both saves fuel and creates interior space. It has taken out more than 34 patents on technologies used in its manufacture. The Tata Group, the country's largest conglomerate, epitomizes the global outreach of modern India; having acquired the Corus metals company last year, it is now seeking to buy Jaguar Cars and Land Rover. The world's second most populous nation presents a striking contrast between that kind of industrial clout and the poverty in which most Indians still live. At one end of the scale are billionaires such as Vijay Mallya, who is promoting India as a Formula 1 racing power. At the other are the inhabitants of Mumbai's periphery who lack decent housing, education and healthcare. The Nano lies between those two extremes: a car built to attract members of the urban middle class who at present perch on motorcycles. That it will add to India's already acute traffic problems should remind the government of how far it has fallen behind in infrastructure development, whether roads, electricity or water. The Nano is a remarkable first from a country that still exasperates for its failure to provide basic services. # Source : As published in The Daily Telegraph, London on January 11th, 2008.

PROBLEM DEFINITION Marketing Research Problem: “To find out the consumer perception on TATA’S NANO in Bangalore city.” TATA’s NANO will be launched on 23rd March 2008. There has been lot’s of excitement and enthusiasm among the mass for the product. To find out how the common mass perceives the product and how should TATA Motors position “NANO” it is important to conduct a research. Objective of the Study: To know the consumer perception on TATA “NANO”.

To find out the awareness level about TATA “NANO”.

To find out the Acceptance level of people.

To know about factors affecting purchase decision of TATA “NANO”.

To find out the target segment for TATA NANO

RESEARCH METHODOLOGY RESEARCH DESIGN: Descriptive Research Method SAMPLING PROCEDURE: Sampling Plan: Convenient Sampling (Non-Probabilistic Sampling Method) Sample Size: 100 respondents QUESTIONNAIRE DESIGN: The research was done on the basis of a structured questionnaire

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FIELD WORK PLAN: 100 respondents were interviewed in and around the Alliance Central campus, Anekal, FORUM Mall, BTM Stage 1 & 2 and Kormangala areas of Bangalore. The group was divided into three groups of 2 interviewers each who interviewed respondents at the above mentioned locations. The respondents were interviewed from 4thMar-7th Mar 2009. LIMITATIONS: The accuracy of the responses given by the respondents.

Data was collected from the limited locations of Bangalore; therefore findings cannot be generalized for the whole city or country.

Language was a barrier between the interviewer and the respondents to collect the responses.

DATA COLLECTION Data was collected from the following two sources: PRIMARY DATA COLLECTION: Primary Data was collected through “SURVEY” using a structured questionnaire through which the research was able to get an insight in to the consumers mind and to learn about perception towards “NANO”. SECONDARY DATA COLLECTION: Secondary Data was collected through magazines, journals, articles and earlier reports. Secondary Data helped in finding the variables that has an effect on the perception made by the people towards TATA Nano.

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Company Profile

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Tata Motors Limited (formerly TELCO) is an Indian multinational automotive

manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of

the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses and

military vehicles. It is the world's eighteenth-largest motor vehicle manufacturing company,

fourth-largest truck manufacturer and second-largest bus manufacturer by volume.[3]

Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar,

Lucknow, Sanand, Dharwad and Pune, India, and in Argentina, South Africa, Thailand and

the United Kingdom. It has research and development centres in Pune, Jamshedpur,

Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. It has a

bus manufacturing joint venture with Marcopolo S.A., Tata Marcopolo, and a construction

equipment manufacturing joint venture with Hitachi, Telcon Construction Solutions.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first

commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in

1969.[4] Tata Motors entered the passenger vehicle market in 1991 with the launch of the

Tata Sierra and in 1998 launched the first fully indigenous Indian passenger car, the Indica.

Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles

Company in 2004 and the British premium car maker Jaguar Land Rover in 2008.

Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE

SENSEX index, the National Stock Exchange of India and the New York Stock Exchange.

Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest

corporations.[3

History

Tata entered the commercial vehicle sector in 1954 after forming a joint venture with

Daimler-Benz of Germany. After years of dominating the commercial vehicle market in

India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata

Sierra, a multi utility vehicle. After the launch of three more vehicles, Tata Estate (1992; a

station wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle),

Tata Sumo (1994; LCV) and Tata Safari (1998; India's first sports utility vehicle).

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although

initially criticised by auto-analysts, its excellent fuel economy, powerful engine and an

20

aggressive marketing strategy made it one of the best selling cars in the history of the Indian

automobile industry. A newer version of the car, named Indica V2, was a major

improvement over the previous version and quickly became a mass-favorite. Tata Motors

also successfully exported large quantities of the car to South Africa. The success of Indica

played a key role in the growth of Tata Motors.[5]

In 2004 Tata Motors acquired Daewoo's South Korea-based truck manufacturing unit,

Daewoo Commercial Vehicles Company, later renamed Tata Daewoo.[6]

In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach

manufacturer Hispano Carrocera.[7] Tata Motors continued its market area expansion

through the introduction of new products such as buses (Starbus & Globus, jointly

developed with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with

subsidiary Tata Daewoo).

In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus,

to manufacture fully built buses and coaches.[8]

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover, manufacturer of

the Jaguar, Land Rover and Daimler luxury car brands, from Ford Motor Company.[9][10][11]

[12]

In May 2009 Tata unveiled the Tata World Truck range jointly developed with Tata

Daewoo.[13] Debuting in South Korea, South Africa, the SAARC countries and the Middle-

East by the end of 2009.[13]

Tata acquired full ownership of Hispano Carrocera in 2009.[14]

In 2010, Tata Motors acquired an 80% stake in the Italy-based design and engineering

company Trilix for a consideration of €1.85 million. The acquisition formed part of the

company's plan to enhance its styling and design capabilities.[15]

In 2012, Tata Motors announced it will invest around 6 billion on developing Futuristic

Infantry Combat Vehicles in collaboration with DRDO.[16]

Operations

Tata Motors has vehicle assembly operations in India, the United Kingdom, South Korea,

Thailand, Spain and South Africa. It plans to establish plants in Turkey, Indonesia and

Eastern Europe.[17]

Tata Motors' principal subsidiaries include Jaguar Land Rover, Tata Daewoo and Tata

Hispano.

21

Tata Motors Cars

Tata Motors is among the top three in passenger vehicles in India with products in the

compact, midsize car and utility vehicle segments.[17] The company’s manufacturing base in

India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar

Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). The company is establishing

a new plant at Sanand (Gujarat). Tata's dealership, sales, service and spare parts network

comprises over 3500 touch points.[17]

Tata also has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine,

Russia and Senegal.[18] Tata has dealerships in 26 countries across 4 continents.[19] Though

Tata is present in many countries it has only managed to create a large consumer base in the

Indian Subcontinent, namely India, Bangladesh, Bhutan, Sri Lanka and Nepal. Tata has a

growing consumer base in Italy, Spain and South Africa.

Tata Motors has more than 250 dealerships in more than 195 cities across 27 states and 4

Union Territories of India.[20] It has the 3rd largest Sales and Service Network after Maruti

Suzuki and Hyundai.

Tata Daewoo

Company's global plans to reduce domestic exposure. The domestic commercial

vehicle market is highly cyclical in nature and prone to fluctuations in the domestic

economy. Tata Motors has a high domestic exposure of ~94% in the MHCV segment and

~84% in the light commercial vehicle (LCV) segment. Since the domestic commercial

vehicle sales of the company are at the mercy of the structural economic factors, it is

increasingly looking at the international markets. The company plans to diversify into

various markets across the world in both MHCV as well as LCV segments.

To expand the product portfolio Tata Motors recently introduced the 25MT GVW

Tata Novus from Daewoo’s (South Korea) (TDCV) platform. Tata plans to leverage on the

strong presence of TDCV in the heavy-tonnage range and introduce products in India at an

appropriate time. This was mainly to cater to the international market and also to cater to the

domestic market where a major improvement in the Road infrastructure was done through

the National Highway Development Project.

In 2004, Tata Motors acquired Daewoo Commercial Vehicle Company of South Korea. The

reasons behind the acquisition were:

Tata Daewoo is the second-largest heavy commercial vehicle manufacturer in South Korea.

Tata Motors has jointly worked with Tata Daewoo to develop trucks such as Novus and 22

World Truck and buses including GloBus and StarBus. In 2012, Tata will start developing a

new line to manufacture competitive and fuel efficient commercial vehicles to face the

competition posed by the entry of international brands like Mercedes-Benz, Volvo and

Navistar into the Indian market.[

Tata Hispano

Tata Hispano Motors Carrocera, S.A. is a bus and coach cabin manufacturer based in

Zaragoza, Aragon, Spain and a wholly owned subsidiary of Tata Motors. Tata Hispano has

plants in Zaragoza, Spain and Casablanca, Morocco. Tata Motors first acquired a 21% stake

in Hispano Carrocera SA in 2005,[7] and acquired the remaining 79% for an undisclosed sum

in 2009, making it a fully owned subsidiary, subsequently renamed Tata Hispano.

Jaguar Land Rover

Jaguar Land Rover PLC is a British premium automaker headquartered in Whitley,

Coventry, United Kingdom and has been a wholly owned subsidiary of Tata Motors since

June 2008, when it was acquired from Ford Motor Company.[22] Its principal activity is the

development, manufacture and sale of Jaguar luxury and sports cars and Land Rover

premium four wheel drive vehicles. It also owns the currently dormant Daimler, Lanchester

and Rover brands.[23]

Jaguar Land Rover has two design centres and three assembly plants in the UK. Under Tata

ownership, Jaguar Land Rover has launched new vehicles including the Range Rover

Evoque, Jaguar F-Type and the fourth-generation Range Rover.

HV Transmission and HV Axles

HV Transmission (HVTL) and HV Axles (HVAL) are 100% subsidiary companies of Tata

Motors engaged in the business of manufacture of gear boxes and axles for heavy and

medium commercial vehicles, with production facilities and infrastructure based at

Jamshedpur. HVAL and HVTL have been amalgamated ton HVAL and is renamed as TML

Drivelines Ltd.

Tata Technologies

Tata Technologies Limited (TTL) provides engineering and design services to the

automotive industry. Tata Motors holds 86.91% of TTL’s share capital. TTL is based in

Pune (Hinjawadi) and operates in the United States and Europe through its wholly owned

subsidiaries in Detroit and London respectively. It also has a presence in Thailand. Tata

Technologies is a software service provider in the IT services and BPO space. Its global

client list includes Ford, General Motors, Toyota and Honda. TTL acquired the British 23

engineering and design services company Incat International Plc for 4 billion in August

2005. Incat specializes in engineering and design services and product lifecycle

management in the international automotive, aerospace and engineering markets.

European Technical Centre

The Tata Motors European Technical Centre (TMETC) is an automotive design,

engineering and research company based at the campus of the University of Warwick in the

United Kingdom. It was established in 2005 and is a wholly owned subsidiary of Tata

Motors. It was the joint developer of the World Truck.[24]

Joint ventures

Tata Marcopolo

Tata Marcopolo is a bus manufacturing joint venture between Tata Motors (51%) and the

Brazil-based Marcopolo S.A. (49%). The joint venture manufactures and assembles fully

built buses and coaches targeted at developing mass rapid transportation systems. It utilises

technology and expertise in chassis and aggregates from Tata Motors, and know-how in

processes and systems for bodybuilding and bus body design from Marcopolo. Tata

Marcopolo has launched a low-floor city bus which is widely used by Chennai, Coimbatore,

Delhi, Hyderabad, Mumbai, Lucknow, Pune, Kochi, Trivandrum and Bengaluru transport

corporations. Its manufacturing facility is based in Dharwad.

Fiat India Automobiles

Tata Motors also formed a joint venture with Fiat and gained access to Fiat’s diesel engine

technology.[25] Tata Motors sells Fiat cars in India through a 50/50 joint venture Fiat

Automobiles India Limited, and is looking to extend its relationship with Fiat and Iveco to

other segments.

Telcon Construction Solutions

Telcon Construction Solutions is a joint venture between Tata Motors and Hitachi which

manufactures excavators and other construction equipment.

Products

Commercial vehicles

Tata Ace

Tata Ace Zip

Tata Super Ace

Tata TL/Telcoline/207 DI Pickup Truck

Tata 407 Ex and Ex224

Tata 709 Ex

Tata 809 Ex and Ex2

Tata 909 Ex and Ex2

Tata 1109 (Intermediate truck)

Tata 1512 (Medium bus chassis)

Tata 1612/1616 (Heavy bus chassis)

Tata 1618 (Semi Low Floor bus chassis)

Tata 1623 (Rear Engined Low Floor bus chassis)

Tata 1518C (Medium truck)

Tata 1613/1615 (Medium truck)

Tata 2515/2516 (Medium truck)

Tata Starbus (Branded Buses for city, inter city, school bus and standard passenger

transportation)

Tata Divo (Hispano Divo; Fully built luxury coach)

Tata CityRide (12 – 20 seater buses for intra-city use)

Tata 3015 (Heavy truck)

Tata 3118 (Heavy truck) (8×2)

Tata 3516 (Heavy truck)

Tata 4018 (Heavy truck)

Tata 4923 (Ultra-Heavy truck) (6×4)

Tata Novus (Heavy truck designed by Tata Daewoo)

Tata Prima (The World Truck designed by Tata Motors and Tata Daewoo)

Tata Prima LX (Stripped down version of Tata Prima)

Tata Ultra (ICV Segment)

Military vehicles

Tata LSV (Light Specialist Vehicle)

Tata Mine Protected Vehicle (4×4)

Tata 2 Stretcher Ambulance

Tata 407 Troop Carrier, available in hard top, soft top, 4×4, and 4×2 versions

Tata LPTA 713 TC (4×4)

Tata LPT 709 E

Tata SD 1015 TC (4×4)

Tata LPTA 1615 TC (4×4)25

Tata LPTA 1621 TC (6×6)

Tata LPTA 1615 TC (4×2)

Tata Winger Passenger Mini Bus

Tata Landrover 1515 F

Electric vehicles

Tata Motors has unveiled electric versions of the Tata Indica passenger car and the Tata Ace

commercial vehicle, both of which run on lithium batteries. The company has indicated that

the electric Indica would be launched locally in India in about 2010, without disclosing the

price. The vehicle would be launched in Norway in 2009.[26]

Tata Motors' UK subsidiary, Tata Motors European Technical Centre, has bought a 50.3%

holding in electric vehicle technology firm Miljøbil Grenland/Innovasjon of Norway for

US$1.93 million, which specialises in the development of innovative solutions for electric

vehicles, and plans to launch the electric Indica hatchback in Europe next year. [27][28][29] In

September 2010, Tata Motors presented four CNG–Electric Hybrid low-floored Starbuses to

the Delhi Transport Corporation, to be used during the Commonwealth games. These were

the first environmentally friendly buses to be used for public

History of Tata Nano

After having successfully launched the low cost Tata Ace truck in 2005, Tata Motors began

development of an affordable car that would appeal to the many Indians who drive

motorcycles.[4] The purchase price of this no frills auto was brought down by dispensing

with most nonessential features, reducing the amount of steel used in its construction, and

relying on low cost Indian labor, as well as a new design concept called Frugal Engineering. [5]

“Frugal Engineering” was a term coined in 2006 by Renault Chief Executive Carlos Ghosen

to describe the design process behind the Tata Nano. This type of design concept was

designed to better the those at the bottom of the pyramid. [6] However, “A Study on

Consumer Perceptions & Expectations for Tata Nano” shows that the bottom of the pyramid

is not very aware of what they are getting when purchasing a Tata Nano. [7] While that paper

may seem to focus on the Indian contribution, the Nano was a truly international effort.

“Tata turned to Germany’s Bosch for a new engine-management system; Italy’s I.D. E. A.

Institute and Trilix for styling and exterior design; India’s Sona Koyo for lightweight 26

steering shafts; America’s Johnson Controls for the seating system; Japan’s Toyo for the

engine-cooling Germany’s Behr for the heating, ventilating, and air-conditioning system;

and India’s Madras Rubber Factory for tougher than normal rear tires.” [8] So to call it the

Indian Car is understandable, but misleading. The Nano is an excellent example of LAPD.

The "LAPD (lean principle applied product development) process is implemented with

utilization of external sources of knowledge and utilization of the digital technology that

support the product development process in order to complement the weakness of

technological capability." [9] While the Nano is engineerd from the bottom up, the existing

economies of scale from other manufactures are not to be ignored. For the Nano, Tata

motors chose to "outsource 85% of the Nano’s components and use 60% fewer vendors than

normal to reduce transaction costs and achieve better economies of scale".[10]

The introduction of the Nano received much media attention due to its low price.

Expectations and effects

Expectations created for the car during the run up to its production may have been out of

proportion with its realized success. A 2008 study, by Indian rating agency CRISIL, thought

the Nano would expand the nation's car market by 65%,[12] but, as of late 2012, news reports

have detailed the underwhelming response of the Indian consumer to the offering; sales in

the first two fiscal years after the car's unveiling remained steady at about 70,000 units

although Tata appears intent on maintaining a capacity to produce the car in much larger

quantities, some 250,000 per year, should the need arise.[13]

It was anticipated that its 2009 debut would greatly affect the used car market, and prices

did drop 25-30% prior to the launch.[14] Sales of the Nano's nearest competitor, the Maruti

800, fell by 20% immediately following the unveiling of the Nano.[15] It is unknown if the

Nano has had a lasting effect on the prices of and demand for close substitutes, however. In

July 2012, Tata Group Chairman, Ratan Tata, said that the car has immense potential in the

developing world while admitting that early opportunities were wasted due to initial

problems.[

Singur factory pullout

Tata Motors announced in 2006 that the Nano would be manufactured in Singur, West

Bengal.[17] Local farmers soon began protesting the forced acquisition of their land the new

factory entailed.[17] Tata first delayed the Nano launch and later decided to build the car in a

different state, Gujarat, instead.

27

Gujarat Factory Controversy

The plant was moved to Gujarat after the controversy in Singur. The Gujarat plant came

under severe criticism from sections of society, due to a large amount of soft-loan offered

by the Gujarat government. The Gujarat government offered a loan of Rs. 9570 Crores, with

a meagre interest rate of 0.1% and with the loan to be paid back in 20 years. The

government also promised to build a four-lane road and give exemption on electricity duty,

registration and transfer charges of land. The government also promised to put up a waste

disposal plant, supply natural gas through a pipeline and provide 100 acres near Ahmedabad

for a township. [19]

The opposition parties alleged mass corruption in the project. The opposition is also

claiming that the project is actually heavily subsidied by the people to the tune of Rs. 60,000

per car, which is more than half of the initial offer price of the car. [20] This subsidization

comes in many forms. The farmers who agreed to lease their land to Tata motors found out

afterward that they would not receive any compensation. The land that government sold to

the company was done so for under half of its market value. This is where the savings lie. [21]

This is just another example of a developing country (or in this case, a state), paying

incentives which are too high in the hopes of landing some investment. The conservative

estimates start at 800 million $US, which is more than Tata's investment.

Price

Announced as the least expensive production car in the world, Tata aimed for a price of one

lakh rupees, or 100,000, which was approximately $2,000 US at the time.[23] Only the very

first customers were able to purchase the car at that price, however, and, as of 2012, the

price for the basic Nano is around 150,000.[24] Increasing material costs may be to blame

for this rapid rise in price.[25]

Compared to the Volkswagen Beetle it has a relatively low price, however. In 1990, a

Beetle from Mexican factories was priced at $5,300,[26] about $9,428 in today's money. The

Ford Model T's initial price was about $850, equivalent to $21,987 today.

Cost-cutting features

The Nano's design implements many measures that make its manufacture cheap.

The Nano's trunk is only accessible from inside the car, as the rear hatch does not

open.[28]

One windscreen wiper instead of the usual pair (also seen earlier on certain Citroen

and Mercedes models) [11]

28

No power steering, unnecessary due to its light weight[11]

Three lug nuts on the wheels instead of the usual four (also seen on Smart) [29]

Only one wing mirror [11]

Radio or CD player is optional (the idea picked on some basic car models in North

America) [11]

No airbags on any model [30]

624cc rear engine has only 2 cylinders (recently implemented in new Fiat 500, with

a surcharge) [11]

No air conditioning in base model (as on most basic car models in Europe and North

America)

Tata Nano 800

There are reports for a larger capacity Tata Nano, the car will feature an 800cc engine and

will compete with the segment topper Maruti Suzuki Alto 800. Most probably the car will

be launched by 2013-end and it will have a competitive price tag of around Rs. 2.5 lakh.

The 800 version will be the last among the three upgraded versions of Nano, while other

two Tata Nano Diesel and Nano CNG will be launched shortly.

Technical specifications

The Nano (2012) is a 38 PS (28 kW; 37 hp) car with a two-cylinder 624 cc rear engine.

The car complies with BS4 Indian emission standards and can also meet European emission

standards as well.

The development of the Nano had led to 31 Design and 37 Technology patents being filed

Radical powerplants

While the Nano is driven by a petrol engine, several more-radical powerplants have been

proposed but not put into production. Also, an upscale version was shown at an autoshow.

Compressed-air engine

Tata Motors signed an agreement in 2007 with a French firm, Motor Development

International, to produce a compressed air car Nano.[36] While the vehicle was supposed to

be able to travel approximately 200 kilometres (120 mi) on $3 US of electricity to compress

the air, Tata's Vice President of Engineering Systems confirmed in late 2009 that vehicle

range continues to be a problem.

29

Diesel

A website has speculated that the Nano might be made available with a diesel engine.[38]

Tata Motors have not confirmed this but have stated: "As of now there is no Diesel variant

of the Nano. The Nano is only available in a Petrol version."

Electric vehicle

Tata has discussed the possibility of producing an electric version,[40] and while it showcased

an electric vehicle Nano at the 2010 Geneva Motor Show,[41] no such car is currently on the

market.

If an EV Nano is sold it is expected to be the "world's cheapest electric car",[42] use lithium-

ion batteries, and have a range of 80 miles (130 km).[43] A Norwegian electric car specialist,

Miljøbil Grenland AS, has been named as a supposed partner in the project.[40]

European export

An upscale Nano concept car called the Europa was shown at the 2009 Geneva Motor

Show.

Car fires

There were reports of several fire incidents involving the Nano. [45] The company denied

those were connected to the car’s design or its parts and blamed “foreign electrical

equipment” found on top of the exhaust system.[45] The company offered to retrofit the

exhaust and electrical systems but refused to recall the cars.[45] Tata extended the warranty

on the car, including those already sold, from 18 months to four years in early December

2010.

Awards

2010 Business Standard Motoring Indian car of the year[46]

2010 Bloomberg UTV-Autocar car of the year[47]

2010 Edison Awards, first place in the transportation category[48]

2010 Good Design Awards, in the category of transportation

TATA NANO: THE PEOPLES’ CAR

One of the greatest strengths of NANO is its tiny price tag. The starting price is

Rs.1,00,000 which is cheaper than Maruti 800, the next cheapest car in Indian 30

market priced at Rs.1,84,641. Even after the road tax, service tax and the other

registration fees, NANO base model will work out to be just Rs. 1,30,000. Even its

advanced versions like NANO LX will at most cost around 1,79,000.

Segmentation for NANO market is done based on geography, rural and urban, and

on demography, family size and income. NANO is targeted at two-wheeler segments,

second-hand car segments, auto rickshaw segments, middle and lower income

segments. TATA positioned NANO in peoples’ mind as “THE PEOPLES’ CAR”,

“ONE LAKH CAR that drives ONE BILLION DREAMS” and “The World’s

cheapest car” without compromising on quality, safety and eco-friendliness.

Consumer Decision making process in buying TATA Nano.

Even though Tata Nano is the least price 4 seater car in India, it falls in the category of

complex buying behaviour.

31

SIGNIFICANT DIFFERENCE

FEW DIFFERANCES

HIGH involvement LOW involvement

FIG 1: Buying behaviour

To substantiate the above statement, in survey 70% people have respondent that buying

TATA NANO is as difficult as buying other cars.

Analysis of stages in complex buying behaviour.

Need Recognition

Information search

Evolution of alternative

Purchase decision

Post purchase evaluation.

Need Recognition.

Need for Tata Nano can be driven either by internal stimuli (Desire/attitude/perception) or

external stimuli advertising etc.

An attempt is made to understand the need recognition process based on Maslow’s theory.

Fig2: Classification of consumer need.

Thus it is clear from the Fig 1- 68% people buy the car driven by safety need. 24% buy a car

driven by esteem need. 8% people buy a car driven by basic need.

32

To arouse the need for Tata Nano Company should look to aim at 76% people who look for

car for safety and basic need knowing the fact that company will not be able to drag the

people who want to satisfy esteem need.

Information Search

In this stage customer wants to find out the information about the Product, Place, Price and

point of purchase. While buying a product like car people seek information from different

sources like.

A) Personal Sources- Family, friend and neighbours.

B) Commercial sources: Advertising, sales people, dealers, display.

C) Public Sources: Mass media and consumer rating agencies

D) Experiential sources: Demonstration, examining the product.

The research shows that majority of people depend on reference group for information while

buying TATA NANO.

33

Since buying Tata Nano is complex buying behaviour people seek lots of information and

clarification. Company should aim on minimizing the customer cost while seeking these

information. The company should focus more on customer testimonials and word of mouth

communication.

Evaluation of alternative:

After collecting the information, consumers arrive at some conclusion about the product. In

this stage consumers are comparing different brands based on set parameters which he or

she thinks required in the product. This process differs from consumer to consumer and with

respect to Tata Nano some have given importance to the price and for few durability and

safety is important.

Since it is clear from the above data that majority of the people are buying the car driven by

safety need. People are considering Chevrolet spark and Maruti Alto as the alternative car.

Even though the price of both the cars is high compare to the NANO people are considering

SPARK and ALTO as alternative of TATA Nano.

An attempt is made to understand the evaluation of alternative “Chevrolet spark and Maruti

Alto”.

Since people are motivated by safety need and Chevrolet safety positioning and 3 years free

servicing warranty is able to draw the customer attention.

34

Fig 3: Preference of channel of information

Point of difference between Maruti Alto, Chevrolet Spark and Tata Nano.

TATA NANO SPARK ALTO

Price

(Ex-Showroom)Rs. 1,23,361 Rs. 3,23,458 Rs. 2,29,148

Rs. 3,184 (for 36

month loan)

Rs. 8,350 (for 36

month loan)

Rs. 5,915 (for 36

month loan)

Immobilizer

Overall Length 3099 mm 3495 mm 3495 mm

Mileage (Highway) 24 km/litre 16 km/litre 18.3 km/litre

Seating Capacity 4 Person 5 Person 5 Person

Maximum Speed 105 Km/Hour 161Km/Hour 137 Km/Hour

Front Brakes

Rear Brakes

180 mm dia. drum b

180 mm dia. drum

brake

Ventilated discs

Self-Adjusting Drum

Disc

Drum

We can see that Tata Nano does not have immobiliser. “An immobiliser or immobilizer is

an electronic device fitted to an automobile which prevents the engine from running unless

the correct key (or other token) is present. This prevents the car from being "hot wired" after

entry has been achieved”.

The above table shows that there is a difference in the features and consumer has to pay

2915/month extra to get additional features offered by Maruti Alto, which he considers as

value for money.

Purchase decision.

In this stage consumer buy the most preferred brand. The decision of making the particular

brand is made after consumer conviction over the alternative product.

Since research has revealed that people do not postpone the purchase of Tata Nano because

it is difficult to make the payment. Price is not the factor which is postponing the purchase

35

decision of the consumers. There are two factors which are making people to postpone the

purchase of Tata Nano.

Lack of information:

People have complete awareness about the price and 100% people have claimed that they

are aware of the price of Tata Nano. When it comes to the features like engine capacity,

mileage, safety people have mixed response and it reveals that company has not paid

attention in communicating the features.

Company is promoting the price tagline and that is not enough to motivate the consumers

who are derived by complex buying behaviour.

Diffusion Process:

Majority of people (70% people) adopt the innovative product when it is 1 to 2 year old in

the market. People are still waiting to watch out this car and they are postponing the

decision of buying this car.

Company should have patience in launching the marketing programme because it is just 19

months since Tata Nano is launched.

Post purchase evaluation:

After purchasing the product consumer will experience some level of satisfaction and

dissatisfaction.

An attempt is made to measure the satisfaction level of TATA NANO users after the

purchase and the security concerns which is raised by many prospective users of TATA

Nano.

36

Satisfaction:

80% of the users are satisfied with the car and they feel that they have got what was

promised by the company and they are happy to refer this car to others. Company should

make use of these happy users in word of mouth advertisement.

20% people are dissatisfied and they are dissatisfied due to interior of the car, finishing of

the car, delivery time and front view.

Safety: Safety is still the concern with the existing users and 80% of the people feel that

they feel Average safe while driving Tata Nano as big cars.20% of people feel that it is

equally safe as big cars.

The above data shows that company has to clearly work on safety point of view and has to

come up with the innovative safety measures to increase the satisfaction level.

Role of impulse purchase in decision making process.

An impulse purchase or impulse buy is an unplanned decision to buy a product or service,

made just before a purchase .One who tends to make such purchases is referred to as an

impulse purchaser or impulse buyer. Research findings suggest that emotions and feelings

play a decisive role in purchasing, triggered by seeing the product or upon exposure to a

well crafted promotional message.

The research has shown that buying a Tata Nano falls under complex buying behaviour

despite the low price. The research has also shown that people wait for 1 to 2 year before

buying the product like Tata Nano. Consumers do not take the decision of buying a car 37

8o% Satisfied 20% Dissatisfied

8o% Average Safe 20% Equally safe Safe

immediately and follows the pattern of decision making process very religiously thus

impulse purchase is not relevant in buying Tata Nano, however it can play an Important role

in choosing the accessories of the car. Marketer can influence the consumer in choosing the

colour and accessories.

.

Target Audience.

Who will buy the Tata Nano? If online polls are an indication, target audience of TATA

Nano "hum-do-hamare-do families," who were the main inspiration behind the Nano. If

online polls at social networking sites are some indication, a bulk of the potential buyers for

the Nano is predominantly male. And, they will be less than 25 years. In one online poll,

39% of the respondents felt that the average Nano buyer will be under 25 years of age while

81% agreed that the Nano buyer will be less than 40 years.

The research has shown that company should craft and execute different strategy towards

target audience and the positioning of the car should be changed.

Research has shown that people prefer Tata Nano as the second car, despite of their

ability to pay for the costly cars. People are postponing the purchase of Tata Nano waiting

for the first car. The target audience of the company are the people who belong to lower

middle class and lower class. Lower middle class and lower class people still purchase the

car based on esteem need to improve their social status.

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80% of the lower middle class and lower class people do not know driving and thus

they are comfortable riding the bike. Company should launch a marketing programme to

teach driving to the target audience. Once the target audience know the driving it will be

easier for the company to identifies anticipates and satisfies customer requirements

profitably.

Research has shown that most of the Target audience has bike and it is not easy for

them to abandon the bike which costs half of the price of Tata nano. Company should give

them the exchange offer and offer them good resell price of bike.

Research has shown that company has not communicated the features, safety and the

benefit to target audience and focused hugely on the price. Company should keep in the

mind the fact that apart from price consumers are looking for many other aspects while

buying a car.

Research has shown that most of the Target audience likes the advertisement which

is informative followed by which shows the safety. Currently the company has the

advertisement which brings pride which is chosen least by the consumers. Company should

design the advertisement which combines the information and safety

.

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Fig 4.consumer preference of Tata Nano

The company should look beyond the current target audience and should focus on

including females in their target audience, since most of the female feel that it is compatible

and easy to drive.

Research also revealed that there is difference in attitude between the prospects and

the current users. Current users are satisfied with the car while prospect users have many

uncertainties in mind. Company should try to minimize this gap by including the marketing

programme which focuses on the word of mouth.

Conclusion:

The strategy should not be to sell maximum cars to target audience, however to sell

maximum car to maximum people.

Even though Nano comes with the tiny price tags it follows a complex buying behaviour

process.

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Fig5: Advertisement preference by consumers.

Company has to work on the positioning of the car and provide more features which

eliminates the doubt of safety from the prospects, thus making decision making process

much simpler for the consumers. Company has to offer test drives to shorten the decision

making process of the consumers. Company has to provide the enough information to the

consumers, which is the key of decision making process.

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TATA MOTORS PROFILE:

Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores

(USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles in each segment, and the

second largest in the passenger vehicles market with winning products in the compact, midsize car

and utility vehicle segments. The company is the world's fifth largest medium and heavy commercial

vehicle manufacturer, and the world's second largest medium and heavy bus manufacturer.

The company's 22,000 employees are guided by the vision to be "best in the manner in which we

operate best in the products we deliver and best in our value system and ethics." Tata Motors helps

its employees realize their potential through innovative HR practices. The company's goal is to

empower and provide employees with dynamic career paths in congruence with corporate

objectives. All-round potential development and performance improvement is ensured by regular in-

house and external training.

The company has won several awards recognising its training programs. Established in 1945, Tata

Motors' presence indeed cuts across the length and breadth of India. Over 4 million Tata vehicles ply

on Indian roads, since the first rolled out in 1954. The company's manufacturing base is spread

across India - Jamshedpur (Jharkhand) in the east, Pune (Maharashtra) in the west, and in the north

in Lucknow (Uttar Pradesh) and Pantnagar (Uttarakhand). A new plant is being set up in Singur

(close to Kolkata in West Bengal) to manufacture the company's small car. The nation-wide

dealership, sales, services and spare parts network comprises over 2,000 touch points. The company

also has a strong auto finance operation, TML Financial Services

Limited, supporting customers to purchase Tata Motors vehicles.Tata Motors, the first company

from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has

also emerged as an international automobile company. In 2004, it acquired the Daewoo Commercial

Vehicles Company, Korea's second largest truck maker. The rechristened Tata Daewoo Commercial

Vehicles Company has launched several new products in the Korean market, while also exporting

42

these products to several international markets. Today two-thirds of heavy commercial vehicle

exports out of South Korea are from Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in

Hispano Carrocera, a reputed Spanish bus and coach manufacturer, with an option to acquire the

remaining stake as well. Hispano's presence is being expanded in other

In 2006, it formed a joint venture with the Brazil-based Marcopolo, a global leader in Body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. Tata Motors also entered into a joint venture in 2006 with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. In 2006, Tata Motors and Fiat Auto formed an industrial joint venture at Ranjangaon (near Pune in Maharashtra, India) to produce both Fiat and Tata cars and Fiat power trains for the Indian and overseas markets; Tata Motors already distributes and markets Fiat branded cars in India. In 2007, Tata Motors and Fiat Auto entered into an agreement for a Tata license to build a pick-up vehicle bearing the Fiat nameplate at Fiat Group Automobiles' Plant at Cordoba, Argentina. The pick-up will be sold in South and Central America and select European markets. These linkages will further extend Tata Motors' international footprint, established through exports since 1961. While currently about 18% of its revenues are from international business, the company's objective is to expand its international business, both through organic and inorganic growth routes. The company's commercial and passenger vehicles are already being marketed in several countries in Europe, Africa, the Middle East, Australia, South East Asia and South Asia. It has assembly operations in Malaysia, Kenya, Bangladesh, Ukraine, Russia and Senegal. The foundation of the company’s growth is a deep understanding of economic stimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. The R&D establishment includes a team of 1400 scientists and engineers. The company's Engineering Research Centre was established in 1966, and has facilities in Pune, Jamshedpur and Lucknow. The ERC has enabled pioneering technologies and products. It was Tata Motors, which developed the first indigenously developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car. Within two years of launch, Tata Indica became India's largest selling car in its segment. The ERC in Pune, among whose facilities are India's only certified crash-test facility and hemi-anechoic chamber for testing of noise and vibration, has received several awards from the Government of India. Some of the more prominent amongst them are the National Award for Research and Development Efforts in Industry in the Mechanical Engineering Industries sector in 1999, the National Award for Successful Commercialization of Indigenous Technology by an Industrial Concern in 2000, and the CSIR Diamond Jubilee Technology Award in 2004. The company set up the Tata Motors European Technical Centre (TMETC) in 2005 in the UK.

TMETC is engaged in design engineering and development of products, supporting Tata Motors'

skill sets. Tata Daewoo Commercial Vehicle Company and Hispano Carrocera also have

R&D establishments at Gunsan in South Korea and Zaragoza in Spain. The pace of new product development has quickened through an organisation-wide structured New Product Introduction (NPI) process. The process with its formal structure for introducing new vehicles in the market brings in greater discipline in project execution. The NPI process helped Tata Motors create a new segment, in 2005, by launching the Tata Ace, India’s first indigenously developed mini-truck. The years to come will see the introduction of several other innovative vehicles, all rooted in emerging customer needs. Besides product development, R&D is also focusing on environment-friendly technologies in emissions and alternative fuels.

43

Through its subsidiaries, the company is engaged in engineering and automotive solutions, construction equipment manufacturing, automotive vehicle components manufacturing and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, and automotive retailing and service operations. True to the tradition of the Tata Group, Tata Motors is committed in letter and spirit to Corporate Social Responsibility. It is a signatory to the United Nations Global Compact, and is engaged in community and social initiatives on labor and environment standards in compliance with the principles of the Global Compact. In accordance with this, it plays an active role in community development, serving rural communities adjacent to its manufacturing locations. With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

Manufacturing: Tata Motors owes its leading position in the Indian automobile industry to its strong focus on indigenization. This focus has driven the Company to set up world-class manufacturing units with state-of-the-art technology. Every stage of product evolution-design, development, manufacturing, assembly and quality control, is carried out meticulously. Our manufacturing plants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North. Jamshedpur: Established in1945, the Jamshedpur unit was the company's first unit and is spread over an area of 822 acres. It consists of 4 major divisions - Truck Factory, Engine Factory, Cab & Cowl Factories, and the Novus. Engineering Division, which has one of the most versatile tool making facilities in the Indian sub-continent. Report: Perception towards TATA “Nano” 7

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Lucknow: Tata Motors Lucknow is one of the youngest production facilities among all the Tata Motors locations and was established in 1992 to meet the demand for Commercial Vehicles in the Indian market. Uttarakhand The company has set up a plant for its mini-truck, Ace, at Pant Nagar in Uttarakhand. The plant will begin commercial production during the course of the year.

Research: Research & Development: Research provides the much-needed inspiration for the birth of new ideas, which in turn breathes new life into products. World-class automotive research and development are key factors that contribute to the leadership of the Company. Engineering Research Centre (ERC): The Research Centre at Jamshedpur regularly upgrades components and aggregates. A well-equipped torture track enables rigorous and exhaustive testing of modifications before they are used as regular fitments.

Safety (CRASH TEST FACILITY): For Tata Motors, safety is of paramount importance. This avenue provides no room for the

slightest margin of error. Tata Motors ERC is the only high-tech facility in India to evaluate the

degree of passenger safety in the event of any high-speed impact. Through a special crash test

facility. Different types of accidents are simulated; the results analyzed, and put to use in the

development of a vehicle that satisfies stringent international safety norms. Special high-speed

cameras record test crashes at the rate of 1000 frames per second. An accident, for instance, at

the speed of 50 kilometers per hour, lasts one eighth of a second. Thus, 125 frames recorded by

these cameras are available for study with the completion of each

individual test. Minimizing Noise (ANECHOIC CHAMBER): Anechoic chamber is a highly sophisticated noise and vibration laboratory, the nerve centre of which is a vast chamber lined with 88,000 cones projecting at various angles from the walls and ceiling. It is one of its kinds in India and is developed completely with in-house facilities. Designing and Styling (CAD CENTRE): The CAD centre is equipped with 53 state-of-the-art CAD stations and the latest software. The

CAD centre is a vital organ of ERC's Cab Design Section. CAD designing involves

development of vehicle specifications, styling interiors and exteriors, reviewing the styling from

the engineering and aesthetic points of view, virtual prototyping to check for design

acceptability and feasibility of manufacture.

TATA NANO Tata Motors' plans would produce, in real terms, by far the cheapest car ever made. An Indian car may soon earn a parking place in history alongside Ford's Model T, Volkswagen's Beetle and the British Motor Corp.'s Mini, all of which put a set of wheels within reach of millions of customers

45

after they rolled onto the scene. Tata Motors is developing a car it aims to sell for about $2,500 the cheapest, by far ever made. # Source :(NYSE: TTM - news - people)

Tata Nano - The little car that might change the world TECH SPECS: Length : 3.1 m Width : 1.5 m Height : 1.6 m To seat : 4 Engine : 643cc, 2-cylinder, all-aluminum Power : 33 BHP Position : Engine, battery at rear end Boot : In front Fuel : Petrol Fuel injection : MPFI Fuel consumption : 20 kmpl. AC : Only in deluxe version Passenger side mirror : No Power steering : No Price : $2500 at dealer + VAT + transport cost. Base version approximate on-road price: $3000 Tyres : Tubeless tyres. Body : All-steel Safety features : Crumple zones, intrusion-resistant doors, seat belts, 2 A-Pillars Suspension : Independent front and rear

Seldom do we see cars that rewrite the history books even before they are seen running around on the roads. And hardly ever do we see cars that vow to put the nation on four wheels. The Tata Nano is one such car – a car that has been in the news for quite a few years, for reasons good and evil. Nano is a car which has breathed into life due to one man. Give credit to Mr. Ratan Tata for his determination to build a low cost family car that has come true, finally! Took long it did, but the Nano came in a beautiful form. Touted as world’s cheapest car by a far cry, Nano has been the talk of the town around the globe. Head honchos of big organizations have been pouring in by numbers to have a look at this engineering masterpiece. We bring you some interesting bits. Looks: Length 3100mm Width 1500mm Height 1600mm Wheelbase 2230mm. Ground Clearance – 180mm You will be wondering why I am talking about the dimensions of the Nano, since all of you know that it is a rather compact and tiny machine. It is because I have good reason to talk about the dimensions. You see, the Nano is going to be faced with Maruti 800 as its main rival. But you could throw in the Alto and Zen Estilo to mark out some design and packaging aspects. Just to get things in perspective, Nano is over 230mm shorter than 800 in overall length but the wheelbase advantage of 155mm over the offering from Maruti makes sure that the Nano is more accommodating than the 800. Tata has managed to squeeze out a 60mm advantage in width and Maruti 800 falls short of

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about 100mm in height. So in essence, you get more legroom, better shoulder room and room more than enough for a turban, if you wear one! But before you enter inside, you are bound to gape in admiration at the beautifully crafted curves of this micro car. I personally feel that the front has a lot of Zen Estilo written on it, but manages to look really funky and cool. The mono-volume design establishes a sea of change from the two-box layout of the 800. What it ensures the Nano with is extremely short overhangs and tight packaging. For a car of this size and image, the Nano is an extremely sexy looking car with futuristic design cues. The bonnet line is steep and unites together with the bumper in a seamless way. Though there is no ‘grille’ per se, the front has a smiling look which accentuates the ‘happy’ feeling. The fog lamps are incorporated in the bumper which has a distinct air dam running across in between them. In profile, the Nano resembles Mitsubishi’s latest small car ‘i’. The rear of the Nano is somewhat recognizable. The tail lamps are inspired from elder sister, Indica. So this is a very compact hatchback, yes? No my friend, you are massively wrong. Even I was dumbfounded when I discovered that the Nano cannot be called a hatchback – a word so true to the way the small cars are. The reason for this is because it does not have a hatch! The tail gate cannot be opened owing to it being joined together with the boot sill. This makes accessing the engine a pain in the bottom. But a hatchback it will be called still. The back side of the Nano is made attractive by the mid mounted exhaust pipe which peeps out of the aggressively designed bumper. The ultra-secret people's car for India - the Tata Nano - is here. How will this car change the way India, and the developing countries drive? The Nano is disruptive tech - make no mistake. The world's car manufacturers have expressed all shades of opinion in the run-up to the Tata Nano. Suzuki has said that it is impossible V W said it is not what they want to do. DaimlerChrysler said they think it is an important market Tata is trying to tap. There was no way Tata could design a car the conventional way. So went at it on a clean slate. And seems to have pulled it off. The rear engined car will have a small boot for luggage storage in the front. In the process of developing the Nano, Tata Motors has added 40 patents to its kitty. This car, if it becomes a hit, will make every auto company change the way it works and look at the volume market. Not only in India, but in entire Asia and every third world country. Offering mobility for the masses is big business. The VW Beetle did that, and so did Henry Ford. Environmental Impact In India, a car like this can crowd the streets, forcing the government to improve infrastructure - and as the evolution of the Western industrial society demonstrates, affordable cars can be a major force for change. But till that happens, this is a car that can seriously crowd the streets - and make life a bit tougher in the short-term. The car will have a two-cylinder 624-cc petrol engine with 33 bhp of power. It will also have a 30-litre fuel tank and four-speed manual gearshift. The car will come with air conditioning in the deluxe version, but will have no power steering. I know, that's pathetic power by American and Western standards. But Indian maximum legal speeds are way lower than them - and Tata Motors anyway claims that the car is as fast as the Maruti 800, India's original People's Car that changed things a couple decades back. And there are a million or more of them on the streets of India already. The car will have front disk and rear drum brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway. The $ 2500 is the dealer price - the actual price on the road might be approx Rs. $3000. The car launched is being avidly watched by the auto industry around the world.

SAFETY Passes crash tests. Side impact test yet to be done, but Tata is confident about it. It has 2 A-pillars on one side to better meet safety norms. No airbags. Airbags are still not a required feature in India. But you have crumple zones, intrusion-resistant doors, seatbelts and anchorages.

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A four wheeler is safe than a scooter. So to begin with, the huge two wheeler population of India gains a safety benefit. But will it pass the safety requirements of a large car or even a high technology compact? Unlikely. But that is not the objective - it is to improve the safety of four-member families like this one that rides scooters and at risk every day. And so here it is. If Tata Motors is right, we could be witnessing a serious disruptive force and one

that might kick-start India on to a high growth path. Successful mass market mobility does that to a

country.

Mechanicals: Everyone, and it does not discount the motoring journos, expected the ‘One Lakh Car’ to have a plastic body. But boy did Tata play it big there! Contrary to everyone’s belief, the Nano is a metal-bodied car with four full-blown doors to ease the ingress and egress. This is a uni-body construction but makes use of a sub-frame which adds to the strength in addition to providing support for drive train and suspension units. The suspension has a story of its own altogether! Well, Tata engineers said that since the rear-biased weight distribution led to some scary moments while testing the car, they had to optimize the suspension setup and add a fair amount of other eccentric but equally helpful technical add-ons like fatter rear tyre while the battery box and fuel tank are placed right underneath front occupants. The engine is what has been the buzz word around the car. It is an all-aluminum two cylinder engine

displacing 624cc with two valves per cylinder driven by a single overhead camshaft. The bore and

stroke are nearly similar giving it a ‘square’ form. Making the Nano move will be the power of 33

horses which will peak out at 5500rpm while 48Nm of turning force will be supplied at a meager

2500rpm which should help the drivability of the car. The Nano will transmit its small amount of

power via a 4-speed cable operated gearbox with the fourth being an overdriven ratio. Tata is

working on developing an automatic gearbox as well but that will not be available when the car gets

launched later this year. In addition to the 624cc petrol engine, the Indian auto giant might also bring

out a common-rail diesel engine (700cc) which might be of the same architecture as the one seen on

Tata Ace.

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DATA ANALYSIS & INTERPRETATION

1. DEMOGRAPHIC ANALYSIS GENDER

Table 1.1

The above mentioned chart clearly shows that out of 100 respondents 64 were males and 36 were females. AGE DISTRIBUTION

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Male 64

Female 36

Total 100

Table 1.2

yrs 64

30-50 yrs 32

Above 50 yrs 4

Total 100

The above mentioned chart clearly shows that majority of the respondents lies between the age group of 18-50 yrs. PROFESSION

Table 1.3

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The above mentioned chart clearly shows that out of 100 respondents 64 were males and 36 were females. AGE DISTRIBUTION

Table 1.2

The above mentioned chart clearly shows that majority of the respondents lies between the age group of 18-50 yrs. PROFESSION

Table 1.3

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The above mentioned chart shows that data was collected from respondents having varied types of

occupation. The majority of the respondents were pvt. sector employee and students.

INCOME GROUP

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Table 1.4

2. FACTOR ANALYSIS To understand the various parameters affecting the perception of the mass towards TATA Nano, the respondents were interviewed with the help of questionnaire mentioned in the appendix having the variables found from the secondary data. Further analysis was done through factor analysis with the help of SPSS software. The goal of the factor analysis is to reduce the no. of original set of variables

53

to a smaller set of comprehensive factors for use in subsequent multi-variant analysis. Therefore through the factor analysis the 13 variables that the perception of the mass can be reduced to lesser no. of comprehensive factors that can explain the other variables. This shall reduce the complexity. The output we get after compiling the input data is: KMO and Bartlett's Test Table 2.1

From this table it can be interpreted that the value of KMO is greater than 0.5, which means that our research data is appropriate and valid. KMO value is greater than 0.5 because no. of respondents were more than 5 times the no. of the decision variables. Table 2.2 Total Variance Explained

Now from the above table of SPSS output the total no. of factors in which the variables can be classified can be realized. From the Eigen values of each factor in the table, the factors having Eigen value greater than 1, shall be considered for further analysis.

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As in this case the Eigen value of 4 factors is more than 1, so the no. of factors shall be 4. The percentage of variance column shows that the total variance explained by each factor. As in this case the 1st factor explains the total variance up to 29.294 %, similarly the entire factors explains the variable. Upto 68.826% of the variables are explained by the 4 factors. It means 31.174% are explained by other factors which have not been taken into account. Table 2.3 Rotated Component Matrix(a)

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a) Rotation converged in 4 iterations. From the above table of output we can identify the distribution of each variable in our selected factors. Our 4 factors are as follows - Factor1 = Design (L value = .952) + Safety (L value = .919) + Affordability (L value = .882) + Mantainence (L value = .830) + Power (L value = .704) shall be combined together to get our 1st major factor, we may name as “ . This factor is explaining 129.076 % of the variation. Factor2 = Comfort (L value = .927)+ Lifestyle (L value = .898) shall be combined together to

get the 2nd major factor, we may name as “ “. This factor is explaining 16.115 % of total variation.

Factor3 = Status (L value = .924) + Accessories (L value = .930) shall be combined together to get the 3rd major factor, which we may name as ‘ “. This factor is explaining 13.608% of total variation. Factor4 = Interior Space (L value = .822). This factor is explaining 10.027% of total variation.

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3. AWARENESS OF TATA NANO Table 3.1 (Responses over Awareness)

The above mentioned pie-chart (Graph 3.1)and table (Table 3.1) shows that majority of the respondents were aware of the TATA’s Nano.

4. ACCEPTANCE LEVEL OF TATA’S NANO To find out the acceptance level, the respondents were interviewed over their liking towards TATA Nano and their Plan to buy on a likert scale. Following were the responses:

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Table 4.1(Responses over Acceptance)

From the above mentioned chart it can be realised that liking of the respondents towards TATA Nano is very high i.e. TATA Nano is liked by most of the respondents. But there is mixed responses over their plan to buy TATA Nano. There were around 40 respondents who may buy TATA Nano and there 32 respondents who may not buy. The rest 28 were neutral.

5. NAME JUSTIFIES THE PRODUCT

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The Graph 5.1 shows that most of the respondents believe that the name “NANO” justifies the

product.

6. NANO OVER BIKE

Most of the respondent will not prefer purchasing “Bike” over Nano”.

7. FEATURE THAT INSPIRES THE MOST TO BUY

NANO

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Price is the major feature of “NANO” that inspires respondents the most.

8. COLOUR

Most of the respondents preferred yellow and red colour as their preferred colour for “NANO”.

9. RECOMMENDATION OF NANO

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From the above mentioned graph it can be observed that most of the respondents shall recommend

“NANO” to others.

10. NANO AS “DREAM CAR”

It can be observed from the chart that majority of the respondents do not see “NANO” as their

dream car.

11. CLUSTER ANALYSIS Cluster Analysis is performed to assign the objects into groups (called clusters) so that objects from the same cluster are more similar to each other than objects from different clusters. Therefore in this research, the sample of 100 respondents can be classified into certain no. of groups or clusters showing the same attributes. This form of analysis will basically help the marketer to position their product in a much effective way by targeting a certain group of individuals. Therefore it is important

60

for the research to find as to which cluster of people TATA Nano should be targeted. Here the grouping variables are age, sex, profession, monthly income, family members, awareness of TATA Nano, liking and plan to buy Nano. After running cluster analysis through SPSS software using the above mentioned grouping variables, following output was obtained: Agglomerative hierarchical clustering First step for clustering shall be Agglomerative hierarchical clustering which breaks up (divisive) a

hierarchy of clusters. Therefore through hierarchical clustering an idea of the no. of clusters into

which the sample should be classified can be obtained. This is done using “Agglomeration

Schedule” mentioned in Appendix.

From this agglomeration schedule it can be observed that the no. of clusters should be 2 or 3. The next step of classification of sample into clusters is done through K-means clustering. K-means Clustering After running the K-means clustering by entering the no. of clusters as 3, following output was obtained:

CLUSTER 1: This cluster includes 13 respondents. The major characteristics of this cluster are that most of them are females, the age group is between 18-50yrs, the major profession is Pvt. Sector employee and students, monthly income is above Rs. 20000, Avg. no. of family members are 6, all are aware of the TATA’s Nano, they somewhat like TATA’s Nano but they don’t plan to buy it. CLUSTER 2: This cluster includes 32 respondents. The major characteristics of this cluster are that most of them are males, the age group is between 18-30yrs, the major profession is Pvt. Sector employee and govt. employee, average monthly income is around Rs. 10000-Rs.15000, Avg. no. of family members are 4, all are aware of the TATA’s Nano, they somewhat like TATA’s Nano but they don’t plan to buy it. CLUSTER 3: This cluster includes 55 respondents. The major characteristics of this cluster are that most of them are males, the age group is between 18-30yrs, the major profession is Pvt. Sector employee and students, average monthly income is above Rs. 20000, Avg. no. of family members are 4, all are aware of the TATA’s Nano, they somewhat like TATA’s Nano but they have larger orientation towards buying TATA Nano. Therefore, TATA Nano should target cluster 3 due to higher intend to purchase, family members are

4 which are suitable for TATA Nano.

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Conclusion & Research Findings TATA Nano’s awareness level is very high (92%) i.e. most of the people are aware about Tata Nano. This has been due to many reasons like controversy in “Singur”, first people’s car in just Rs. 1 lakh, brand name of TATA linked with NANO etc. This is a very good sign for TATA Nano to capitalize on their public relations.

Private Sector employees and students have higher degree of acceptance level for TATA Nano.

The most important factors that affect the purchasing decision of the people to purchase a small car like “NANO” are Design, Safety, Affordability, power, comfort, lifestyle, accessories status and interior space.

Research shows that the name “NANO” is very well accepted by the people as most of them believe that “Nano” justifies the product.

It was also observed in the research that majority of people shall not prefer “Nano” over “Bike” as they believe that bike has some additional benefits over “NANO”.

“Price” was the most important feature that shall inspire most of the people to purchase “NANO”. As the car is available in Rs. 1 lakh only therefore most of the people believe that it is affordable to them.

“Blue” and “Yellow” are the most demanding color that shall be preferred by most of the people for their “NANO”.

It has also been found out through research that most of the people shall recommend TATA’s Nano to other which is a very good sign for TATA Motors.

Also, most of the respondents believe that “NANO” is not their dream car.

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Bibliography & References

Exploratory Factor Analysis - A Book Manuscript by Tucker, L. & MacCallum R. (1993). Retrieved June 8, 2006, from: http://www.unc.edu/~rcm/book/factornew.htm

Raymond Cattell. Retrieved July 22, 2004, fromhttp://www.indiana.edu/~intell/rcattell.shtml

E. B. Fowlkes & C. L. Mallows (September 1983). "A Method for Comparing Two Hierarchical Clusterings". Journal of the American Statistical Association 78 (383): 553–584. doi:10.2307/2288117

Schutt, Russell K. 2006. "Investigating the Social World: The Process and Practice of Research". SAGE Publications

Mohanty, Mrituinjoy (2008-01-10). "Why criticising the 1-Lakh car is wrong". Rediff News. http://www.rediff.com/money/2008/jan/04tatacar.htm. Retrieved on 2008-01-10.

Tata's High-Stakes Bet on Low-Cost Car". The Wall Street Journal, Eric Bellman, Jan 10, 2008. http://online.wsj.com/article/SB119993102461279857.html.

First Look: Ratan Tata unveils Nano". IBN. 2008-01-10. http://www.ibnlive.com/news/first-look-ratan-tata-unveils-nano/56038-7.html. Retrieved on 2008-01-10.

"Deutscher Konzern verdient am Tata kräftig mit" (in German). Die Welt. 10 January 2008. http://www.welt.de/wirtschaft/article1536886/Tata_Nano__der_indische_Volkswagen.html. Retrieved on 2008-03-22.

http://economictimes.indiatimes.com/News/News_By_Industry/Auto/Automobiles/Rahul_Bajaj_says_Mamata_fought_for_farmers_not_politics/articleshow/3456250.cms

http://www.autoexpo.in/news_jan_23.asp

http://economictimes.indiatimes.com/News_by_Industry/Nano_to_rollout_from_Pantnagar/articleshow/3523806.cms

http://www.timesonline.co.uk/tol/driving/news/article3168303.ece

http://in.reuters.com/article/topNews/idINIndia-35844720081007 2008 Issues

http://www.timesonline.co.uk/tol/driving/article3164205.ece

http://www.cbc.ca/consumer/story/2008/01/10/nano-tata.html

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AppendixAPPENDIX 1 QUESTIONNAIRE

SECTION – IPERSONAL DETAILS

64

65

66

67

68

69