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The Analysis Of The Impact Of Strategic Marketing: Study Of Tata Nano

Background of company

Tata Motors was formerly known as TELCO (Tata engineering and locomotive company). It is one of the multinational automobile corporations located in Mumbai, India. This organization is considered to be the largest manufacturer of passenger automobile and commercial vehicle in India. This is one of the parts of TATA group (Tata Motors, 2014). Company was ranked as 20th largest automaker by OICA; in 2006. In the year 1945, Telco began their operation and they manufactured their first commercial vehicle.

This manufacturing was in collaboration with Daimler Benz AG (Tata Motors' Nano strategy was flawed, 2013). They ended their operation with Daimler Benz in the year 1969, when the organization got themselves listed in NYSE in 2004. Further, in 2005 company was ranked among the top companies in India as it was having an annual turnover exceeding 320 billion. Tata motor is stated to be the leaders in commercial vehicle in each segment of their operation.

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“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts leads to the action”- Dr. A.P.J. Abdul Kalam

These motivational words expressed by India’s former president Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata. He was the former chairman of Tata sons. In the year 2000, he has been awarded by highest civilian award Padma Bhushan. In 2003, Mr. Ratan Tata dreamt of bringing out a car for middle income people, which will be safe and affordable. After 5 years of proper research, overcoming all the barriers relating to financial and technological he kept his promise and came up with Tata Nano. In the process of manufacturing, Tata motors have added 40 patents to its credit. Car was launched in the year 2008, in 9th Auto expo. Company launched this car with a price tag of $2500. Newsweek identifies Nano to be “new breed of 21st century cars” “a contrarian philosophy of smaller, lighter and cheaper”. Even Wall Street 2013 Journal expressed that Nano will be leading a global trend towards small cars (What's the future for Tata Nano?, 2013).

Mr. Ratan Tata’s major strategy to come with such a car was all because of his awareness, that majority of the Indian people have two wheeler transports and could not afford a four-wheeler car. In the beginning when car was not launched, the industry had a conviction that no company can produce such an affordable car. Even in the initial stage media speculation rumored that it will be a simple four wheeled auto rickshaw (Choubey, 2013). However, Times of India reported that “Tata Nano is properly designed and a built car”. Further, Mr. Ratan Tata reported that Tata Nano is not a car with plastic curtains or no roof; rather it is a real car. There were various expressions given by other competitors in the market, when Tata Nano was first time launched in the market. Suzuki stated that it is impossible, Daimler Chrysler expressed that Tata Company is trying to tap an important market segment and Volkswagen argued that it is not the way they want to do (Kuila, 2013).

Any change in the organization depends upon the future goals and objectives of the business. Decision of the management is to implement the change in its current business operation due to accomplishment of those objectives. There are some factors which derive that there should be organizational change in the business (Bevington and Samson, 2012). It may be due to technological development, strategic change due to market condition, competitor’s strategy of customer demand. There are also some other factors which leads to change in organization such as business culture or it may be due to adoption of new legislations, laws and policies (Hayes, 2014).

Author Rao and Prasad (2012) has critically evaluated about the change in business organization of Tata Motors. They reveal that organizational change is based on planned framework of management and it is due to some reasonable factors (Rao and Prasad, 2014). Considering on the organizational change, the authors have evaluated that for introducing an affordable car that is Tata Nano, company has implemented major changes in its business organization. These changes were based on some key aspects such as objectives of Tata related to cost ownership etc. But there are some key factors which were planned by the Tata Motors while implementing the change (Venkatesh, Lawrence and Chen, 2013). These are related to coalition, vision of change, short-term plan base on short term winning and to develop the change in corporate culture of Tata Motors.

Overview of topic

Strategic marketing is considered to be an organization strategy that will help in combining all the marketing goal of an organization into comprehensive planning. It can be said that an effective marketing strategy purely depends upon market research and focus on right product mix. This helps company to increase its profit potential and sustainability of business (Strategic marketing, 2012). Marketing strategy of an organization is said to be the foundation of marketing plan. In other words, Strategic Marketing is ways to show different from the competitors' sales strategy where by company can deliver value added goods or services to their customers (Graham, 2008).

Well before the launch of Tata Nano in the market, its logo was already set in the mind of Indian citizens as “The people’s car”. This is how Tata motor started its advertising campaign for the people of India. This marketing strategy of company had a great effect in the mind of middle class people of India and they have already begun dreaming of their own car. Nevertheless, it was important to understand the marketing impact on Tata motors. For company it was becoming difficult to predict the sales potential of Nano(Tata Nano: Marketing Strategies, 2013). However, Tata motors were aiming to build up the cheapest car, in order to fulfill the expectation of consumers. Tata motors marketing strategy for Nano has leaded the car to be a discussion point for the country with a population of 1 billion. Further Even Tata company thought that there was having no worries of marketing of Nano at a particular time. Everywhere around the nation such as TV channel, investors, citizens, automobile industry experts and many other was discussing that “Is it really possible” to have a car with such features (Business plan: Tata Nano, 2009). Tata motors marketing with respect to advertisement of Tata Nano has lead into huge positive success for the business. It has perhaps reduced the overall marketing cost of Tata. People had only one question in their minds that “when can we buy the car”.

In the year 1991 with the de-licensing in the Indian automotive industry it has lead the sectors towards a growth by 17%. The industry has helped in generating employment level by 1.31 crores. Car market in India is generally covered by some popular brands such as Maruti Suzuki India, Honda, Toyota and Hyundai. In year 2014, it has been found that domestic sales in automobile market have increased in July month. India’s largest carmaker stated that there domestic sales has increased by 19.9% to 90,093 units. Due to sluggish economy, there was a fall in the overall demand in the auto industry products. There have been various initiatives from the part of government, in order to support this sector. Government in their interim budget reduced the excise duty on small cars, motorcycles and commercial vehicles by 12% to 8%. India is considered one of the key players in the automotive sector with respect to policy, actions and strategies of players. All these factors leads India to have a fundamental impact on the global auto landscape. It is estimated that India is going to exceed every major European market by 2015. Presently country is the 4th largest in the automotive sectors in terms of volume in the world. Further, it was also found that India automotive sale is also going to exceed US market by the period of 2030 (Rao, 2012).

India is one of the largest and fastest growing economy in the world. From every year, the standard of living of a consumer is increasing with the escalation in their needs. Consumerism in India is into newer heights and is shifting to a different era. Buyers of India is having exposure of the entire market of the world, leading to bring out the best goods and services in home country.
In India, roads are considered the most dominating transportation in present. These roads carry almost 90% of passenger traffic and 65% freight. In Indian roads, the capacity of lane is low. It has been seen that there are almost two lanes or less in national highways. Most of the Indian roads are congested; poor quality and maintenance of these roads also stay very poor.

Research framework analysis

For any study, this section is considered very important as it helps in drawing out effective results. The entire research framework for a research is based on the objective of study. Here author decided about various tools and techniques that can use in the present research.

Research design-Researcher will apply Descriptive marketing research (Research design, 2013). Descriptive marketing is a form of conclusive research used to describe both the composition of a group in such terms as income, gender, age and education and the characteristics of group members in regards to both current and future behavior.

Research strategy- Author is going to adopt survey method as a research strategy for this study. E-mail survey method will be approached using questionnaire technique. This tool will help as TATA Nano is only available in India. This strategy is also helpful as e-mail survey can be useful for close-ended questions and highly effective in customer research.

Data collection and analysis- Data will be collected from the interview method and it will be accessed from managers of the Tata Motors. Exploratory method of interview will be used on the basis of which information related to marketing mix of Tata Nano will be accessed and this data will be analyzed by using thematic analysis of qualitative technique .

Significance of research

The study will help in understanding the impact of marketing on Tata Nano. Even this research can be helpful for those organizations that are into automotive sector, as it will help them to cope with strategic marketing. Other researchers can use this research in order to develop better theoretical background for their study. This research will give an overview regarding factors that affect the marketing, to those businesses who wants to come up with a new product in the market. The dissertation will also explore the challenges associated with strategic marketing.

Literature Review

Literature review section of this study depicts about the findings, reviews and results of the different authors and researchers who also have studied their researches in strategic marketing. In this section of the research project viewpoints the authors is detailed which is based on examining the impact of strategic marketing and challenges involved in it. Strategic Marketing implies about that marketing strategy of the company which totally differentiates from competitors and is based on some specific strengths of the organization (Griffin,2002). Primary aim of this marketing strategy is to offer valuable products to its customers. On the other side exploring the concept of marketing also helps in suggesting the better measures which can be applied by Tata to increase their sales (Tinson, 2004).

Strategic Marketing

According to Tinson, (2004) Strategic Marketing is the combination of the strategy and marketing activity of the business organization in order to deliver valuable product to its customers. The main aim of the company to use this concept is to successfully deliver the product to their customers which are differential from the other products of the market (Tinson, 2004). In this marketing tactic, firstly management makes the strategic planning, then analyses the strategy, formulates them and on the basis of which final strategy is implemented by the organization. In marketing the initial process is comprised of internal and external analysis of the environment and then strategies are formulated (Sikdar and Vel, 2010). It includes the strategies related to targeting, positioning, branding, innovation, product development etc. Finally on the basis of the marketing planning the strategies are implemented.

Focusing on the strategic marketing of the Tata Nano, Tata has adopted an innovative concept for marketing of its Tata Nano car. According to Kurtkoti and Prabhu (2011) company has designed its marketing strategy by attracting the customers through offering one of the cheapest cars in the world. Company has not only attracted the customers of India but also caught the attention of other car manufacturers of the world. In its marketing activity, company has used tactic of price driven marketing strategy.In terms of Indian currency, pricing of Nano was just rupees 1 Lakh or in terms of UK currency it was of only £1015 (Kurtloti and Prabhu, 2011). At this affordable pricing, the company was also offering some value added features in this product. As per the views of Velu and Khanna, (2013) With the help of strategic marketing tactic, Tata Nano is comprised with the features such as comfort, fuel efficiency, low emission and compatible with low parking space (Velu and Khanna,2013). Involving of these features and using of pricing strategy has enabled Tata to make them different from other car manufacturers (Glynn,2011). Combination of these strategies acts as a competitive advantage and also has made differentiated image in the mind of customers.

Cole, (2003) has examined in their study that the concept of strategic marketing begins from the strategic planning as it includes the systematic process which gives the direction to the business that what they want to pursue (Cole, 2003). On the basis of this information, management allocates and plan for the resources for its marketing technique (Henry, 2008). Marketing strategies includes a successful marketing plan which assists the business in achieving the objectives of strategic marketing and also the rationale behind selection of strategies. All these significant aspects of strategic marketing pay greater impact on the marketing strategies of the companies (Ferrell and Hartline, 2011).
According to Ferrell and Hartline, (2011) in a marketing it is essential that a successful marketing plan is to be included. It comprises of some primary activities on the basis of which the company plan for its strategic marketing while launching of its product in the market (Dann and et. al., 2007). For the strategic marketing, company first analyzes the situation, examine the opportunities and then finalize its goal and objectives for its marketing technique. All these activities are planned in marketing plan of the business as it also comprised of activities related to advertisement, promotion, distribution channels and other estimated information related to sales projection.

Parvinen, Tikkanen and Aspara, (2007) Organizations select its strategies on the basis of some reasonable actions as it facilitates them in their decision making that what factors are to be considered on its strategic marketing (Parvinen, Tikkanen and Aspara, 2007). Factors which are considered by the company are related to economic conditions, demographic factors, political and legal actions and also the social and cultural factors (Wilson and Gilligan, 2012). On the basis of this information management takes their action that how they will attract the customers of market with their strategic marketing tactic. In the case of Tata Nano, company has deemed all these factors during its planning of strategic marketing. Company was launching a car which is totally different from the other products of the market. They have emphasis on all the different factors. For example the car was specially launched for middle and lower income group which is the part of demographic factor (Rao and Prasad, 2014). Another is legal factor in which fulfils the obligation of fuel efficient and low emission vehicle. Look and design of the car was very small and stylish which suits to the choices and needs of the people.

As per the views of Venkatesh, Lawrence and Chen, (2013) one of the main factors which were emphasized by Tata Nano in its strategic marketing was the economic conditions (Venkatesh, Lawrence and Chen, 2013). The rationale behind selection of this important factor and which also helps the company to attain positive impact on its business was the economic condition of the India. In India people are not capable enough to buy a four wheeler vehicle as the prices are too high. Main aim of the Tata Company was to launch that car which fulfills the needs of Indian people basically who belongs to the lower and middle income level group. Company has launched a car which is one of the world’s cheapest car and with variety of features and also named this product as a “People’s Car” (Tata Motors' Nano strategy was flawed, say experts, 2013). In adherence to all the aspects of strategic marketing, Tata has used its marketing strategy in Indian market.

Dimensions involved in Strategic Marketing and its impact

McAlister and Ferrell (2002) ahs critically evaluated about some dimensions and concepts which are involved in strategic marketing which are considered by the organization while implementing its strategic plan (McAlister and Ferrell,2002). These dimensions enable the business organization to successfully develop its marketing strategy and also to attain competitive advantage in the market (Malcolm, 2006). Below are some dimensions and concepts which are involved in strategic marketing are detailed. It also makes huge impact on the strategic marketing of the company.

Marketing capabilities

According to Graham(2008) Marketing capabilities of the company implies about the marketing resources which determines that whether it will provide competitive advantage to the business or not. These capabilities made huge impact on the business for achieving the competitive advantage (Tzokas, and Saren, 2004). It includes the marketing capability of the business firms in terms of developing strategy, relationship with customers, pricing strategy, process of management, key resources and also includes the innovation and technological development (Graham, 2008).

Strategic marketing of Tata Motors involves all these factors while launching a car at an affordable price. First was a key resource which includes the team of highly professional and skilled employees, second was relationship with the customers as brand name of Tata in Indian automobile market. There are capabilities in terms of designing a car at cheaper price and resources which are capable enough for offering wide varieties of features in Nano.

Marketing Orientation

Mainly there are two different approaches of marketing orientation. First approach is based on the features of the product.These products are purchased by the customers due to its quality, characteristics and price (Jaakola, 2006). On the other side the next approach of marketing orientation is based on satisfying the needs and demands of the customers.Application of any of these approaches makes greater impact on the strategic marketing technique of the business organization in this current competitive market(Ambler, Kokkinaki and Puntoni, 2004).

Jaakola(2006) has inferred in his study that dimension of marketing orientation has made huge impact on the strategic marketing of Tata Motors. They are offering a car which is at very lower price and has an inclusion of variety of features such as comfortable, small size, safe and also fuel efficient (Parvinen, Tikkanen and Aspara, 2007). It fulfills the first approach of marketing orientation. In addition to this Nano also has fulfilled the second approach of marketing orientation which was satisfying the need of Indian Customers as majority of the people of country are not capable to purchase any four wheeler. Launching of Nano has fulfilled the need of low and middle level income people of India to buy a car (Kurtloti and Prabhu, 2011).

Strategic Marketing with Positioning

Researcher Vassinen (2006) has critically evaluated some factors which makes direct impact on the strategic marketing of the company. These factors are objective of business on the basis of its key resources, competitive strategy, operational performance and marketing orientation (Vassinen, 2006). Positioning of products in the market is based on some key strategies of the company which may be of differential product, cost leadership or having advantage of low cost at which wide varieties of features can be offered in its product. Achieving of any of thesestrategies, assist the business to attain competitive advantage (Jaakola, 2006).

Tata Nano car has created its position in Indian Automobile market. Strategic marketing of the Tata Motors is involved with the characteristics of low cost and differential product (Kurtloti and Prabhu, 2011). Company has manufactured the car which is at very low price an even offering wide range of facilities in its car. These features were the key aspects of the strategic marketing of Tata Company. After launching of Nano car, company also has planned to launch its car in other developing nations of the world such as Indonesia and in mnay other countries of Asia.

Innovation Orientation

According to Hooley and Greenlay (2005) companies which have high degree of innovation creates their differential image in market in compare to its competitors. They are capable enough to offer something different as it is the constituent of successful product development (Hooley and Greenlay, 2005).

In strategic marketing of Tata Nano, company has effectively used the dimension or concept of innovation orientation in their product. They had innovated car which was smart enough with the features which are offered in a car with high price. By using the advanced technology and some innovative concepts in Nano car they had attracted the customers to the buy one of the cheapest car in the world. Company has made it possible by accumulating a team of highly professional and skilled engineers who were engaged in this project from last 2-3 years to build a car with a cheap cost and also includes variety of features. Advanced technology andmodern ideas were implemented by Tata and greater focus was paid on the cost of production and to fulfill the needs and demand of customers of middle level income group of India.

Strategic Marketing at new product launch

Doole and Lowe, (2008) have critically evaluated in their study that before developing the strategic marketing for launching of new product, it is very essential for the business organization to set the goals and objectives which they want to achieve. Good strategic marketing of the company includes the appropriate plan on the basis of which final strategy is adapted (Bryson, 2002). Aspects which covered in strategic marketing are. First is selection of the key buyers or customers of the product, recognizing the segments in which company will sell their products and then planning is made regarding distribution channels. Further in the next step, strategy for the unique positioning is created and also the approaches are decided that how they will compete in that particular segment (Roetzer, 2011). But in the main focus which is paid by the company while launching a new product and to implement the strategic marketing is to plan that why their product is unique and different. In addition this pricing is also the key factor which plays significant role in strategic marketing (Doole and Lowe, 2008). Price is the primary factor which determines that whether it will lure the customers to buy the new product of the company or not.

On the other side, business also focuses on the advertising and promotional strategies that how the new product of the company should be promoted to attract the customers and influence them (Ferrell and Hartline, 2011). Before launching of a product which is new and to lure the customers it is very necessary for the management to plan such marketing technique which is based on specific strategy. Considering on the strategic marketing of Tata while launching of Nano car in the Indian market, company has planned its entire strategy by considering price, unique features, segmentation and promotional tools and also about the elegant features of Tata Nano. Company also has focused on the aspects of consumer behavior so that people can understand that why company has launched this product in the market (Rao and Prasad, 2014).

Strategic marketing of Tata Nano involves all the aspects. Firstly the pricing of the car was very affordable and company has inferred that its Nano is one of the world’s cheapest and smallest cars which will be available at price of INR 1 lakh. It is launched for the people of India who belong to the group of lower and middle level income group. It was the reason that Tata has also named the car as “People’s Car” (Tata Nano: Marketing Strategies, 2013). Elegant small design and the small size of the car were some of the key factors of strategic marketing of the company.

Other key aspects which were considered by the Tata in its marketing tactic were related to the consumer behavior that the product is greater value of money. At very affordable price, company is offering a four wheeler vehicle, good engine capacity and variety of features and many other factors which infers that product is termed as value for money (Kurtloti and Prabhu, 2011). To sell its product in market, company also has focused on its distribution channels at the time designing of its marketing strategy. One of the key feature in Tata Nano’s strategic marketing was the booking window which remained opens for 17 days and on the basis of lottery system, company has sell its car to its products. Other distribution channels were online booking facility, 214 Dealership stores of Tata and also many other options were offered by the company for it product (Business plan: Tata Nano, 2009). On the basis of the strategic marketing of Tata Nano, it was determined that how effectively the company has planned its approach of strategic marketing to influence the consumers of market.

Strategic marketing of Tata Nano

With the help of marketing Tata Nano wants to make differential image in the mind of the customers and also to attain competitive advantage in the Indian car market. Company has combined some unique features in their product which make their car different from the other cars (Vassinen, 2006). In terms of product mix, the company has done the marketing of Nano by offering stylish design, comfort, fuel efficiency, also an eco-friendly car. In terms of branding Tata Nano already has incorporated with the one of the famous brand name Tata Motors (Malcolm, 2006). One of the major parts of company’s strategic marketing was the pricing strategy.

Pricing of Nano was only One Lakh rupees, which infers about which can be easily afford by middle level income group. On the other side the promotional activity of the company was very unique and has made positive impact on Tata Nano. Tag line of the company was also very catchy “Have Fum, pay Less, Get More with Tata Nano” (Velu and Khanna, 2013). In its promotional activities company has used wide range of promotional activities which includes online advertising, newspaper, print media, television ads, marketing campaign etc. The major strategy of the company was to develop a low cost product through which they want to fulfill the dreams of middle level people of India (Rao, 2012). On the other side company also has efficiently use its concept of strategic marketing which implies by using of optimal resources to develop a product with lower price.

Challenges involved in Strategic marketing of Tata Nano

Increasing international competition: Brooks and Simkin, (2012, pp.494–514) has concluded that “High competition in the international market is the most crucial challenge for each organization at the time of introducing new product in global market”. Tata Nano has been facing such types of strategic challenges at the time of marketing of Nano car in the international market. On other hand, Holm, (2006) has concluded that “High competition has influenced the overall performance of the company and augments the overall cost of the products and services” (Holm, 2006, pp.23–33). This statement has described that strong competition in the global market has increased the cost and reduced the overall profitability and income of the Tata. In contrast Narasimhan, (2005, pp.323–324) has concluded that “In the high competition organization should focus on effective marketing planning which can improve the overall performance of the company and resolve the strategic challenges also”.

Human relations problems: Fuchs and Diamantopoulos, (2010) has concluded in their study that “strategic marketing challenges of an organization also include the problem of human relation management” (Fuchs and Diamantopoulos, 2010). This study has helped in analysing that Tata Nano has also faced the problem in employees and customer relationship management which affect the marketing performance of the organization. On other hand Narasimhan, (2005, pp.323–324) has provided different view towards the strategic challenge that “Human relationship problem can be resolved by the appropriate HR practices for employees as well as suitable identification of customer’s requirements” (Narasimhan, 2005). Thus, for resolving the human relation problem Tata Nano has faced different challenges regarding the modification in the HR practices and identification of the customer’s requirements. On the whole, such types of strategic challenges affect the advertising presentation of the organization in the international market.

Problem in assessment of the marketing performance: Salaimeh, 2008 has concluded that “After implementing the strategic marketing plan organization also faces the issue in assessing the marketing performance” (Salaimeh, 2008). It shows that at the time of marketing Tata Nano has countenanced the problem in evaluating the overall performance of their marketing planning in terms of customer’s awareness and advertising, brand image and promotion. On other hand, Daft, 2008 has asserted that “marketing performance can be measured by the different techniques such as histogram and metrics but all requires high skills and knowledge” (Daft, 2008). Thus, measurement of the marketing performance through the different statistical tools and techniques was also a major issue for Tata Company at the time of strategic marketing of the Nano Car.

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