1.4 Product Strategy
The Tata Nano CX, including all the features described in the earlier Product Review section, will be sold with a three-year warranty or 100,000km warranty, whichever comes first. We will introduce the Tata Nano LX during the following year, after we have established our Tata brand.
The brand and logo will be displayed on the car as well as in all marketing campaigns.
1.5 Pricing Strategies
The Cost price is an estimated USD2, 420 or equivalent to RM8,954, which includes import tax, duties excise , sales tax, shipment costs and assembly cost. The selling price for the Malaysian market is RM13,704.00, which is inclusive of standard accessories, but exclude road tax (RM70.00), registration fees (RM150.00), number plate (RM50.00) and ownership endorsement fee (RM50.00), sales tax (RM1370.40) which amounted to RM320.00. The On-The-Road price will be RM15797.40.These prices reflect a strategy of taking a share from established competitors, such as Perodua’ s model of Kancil and Viva.
1.5.1 Setting the price – selecting price objectives
Tata Nano Malaysia (TNM) has set major three objectives in its effort to position itself in the Malaysia Automotive market. The objectives are: Survival, maximum current profit and maximum market share.
a. Survival
Intense competition from Malaysia’s second car manufacturer, Perodua for a share of the automotive market segment for the below 1,000 cc category will spur TNM to ensure that the car price covers variable costs and some fixed costs. In this case, survival is a short term objective as in the long run, TNM will add value such as added safety features to the Nano range.
b. Maximum current profit
TNM has set a price that will maximize current profits, cash flow and return on
investment, after taking into consideration the demand and costs involved. As this category of small foreign cars segment has not been really tested by other manufacturers, therefore the demand is rather difficult to estimate but TNM is confident of a good response towards its entry into the Malaysian market.
c. Maximum Market Share
For the Malaysian market, TNM will implement the market-penetration pricing, which is to set a low price for a new car in order to attract a large number of buyers and a large market share. This will be done by achieving high sales volume, which will results in falling costs, allowing the company to cut its price even further. We are positive enough that the Malaysia car market is highly price sensitive, as a low price produces more market growth. TNM is also confident that production and distribution costs will fall as sales volume increases and the low price of Nano cars will help to keep out competition and maintain its low-price position. The low-price entry will provide Malaysians
consumers with a viable alternative to Perodua –Malaysia second National car.
Further liberalization is expected as Malaysia implements the ASEAN Free Trade Area agreement, which commits the Malaysia Government to scrap foreign car taxes.
2.0 PROMOTION STRATEGIES
2.1 Objectives of Promotion Strategies
Before determine the promotion strategies, we need to very clear about what are the objectives we need to achieve. We know as above, our missions are to promote Tata Nano in Malaysia and increase the sales quarterly. Tata Nano is very new for Malaysian, they feel fresh with this new brand and concept of this car. Tata Nano will get into Malaysia market in July 2009.
So first of the objective for promotion strategies are aims to create brand awareness and concept/knowledge of this new car – Tata Nano. This is the cheapest car in the world and burst into the worldwide market in the short time. But still is the new brand for the Malaysians, so we do the advertisement and organize the event or campaign in sufficient detail to establish the good
brand attitudes. Brand awareness is important to provide a foundation for brand equity.
After that, our second objective is knowledge and persuasive. We aim to create liking, preference, conviction, and purchase of a Tata Nano car. We can do the comparison with other cars which are higher purchase price and this price is not every people will be affordable especially lower income families and students. Beside that we will convince current purchasers that we will give the potential customer to enjoying the good experience with Tata Nano by give try to drive the Tata Nano before buying the car. And also will provide them warranty to the Tata Nano.
We will organize all the promotion strategies with lower cost to maintain the lower purchase price for the Tata Nano in Malaysia.
2.2 Promotion Tag line
‘Have Fun, Pay Less, get more with Tata Nano’
Why we establish this tag line? Because this is make all the Malaysian to easy to remembered Tata Nano and feel happy all the ways with Tata Nano. Tata Nano is safety and you can travel everywhere by Tata Nano with your family or friends with fun, but you just need to pay all of this at lower price –Pay Less & Get More.
Beside that we can enjoying special fun with Tata Nano, our earth also will feel happy with Tata Nano because Tata Nano also is the environment friendly car.
2.3 Advertising Program
We aims to inform Malaysians this is the cheapest car in the world and persuade Malaysians to buy Tata Nano due to this car is safety, useful, all in good quality and also environment friendly by developing an advertising program.
2.3.1 Online Advertisement
First step we start before lunching Tata Nano, we do the online advertisement. Tata Nano created a Web site – www.tatanano.com – on March 2009 to better communicate with the customers. In the Web site, we posted the photo categories and videos to provide customers the information and special features of Tata Nano and bring them inside the company. In addition to photos and videos, the web site links to recent news about Tata Nano and space for public feedback.
Besides that, Blogs have become an important outlet for word of mouth which are regularly updated online diaries. Blogs is bringing together people with common interests. They vary wide and can influence a vast audience due to many internet users have read Blogs. We can establish the blog network and carefully monitoring to find out what's on people's minds especially the potential customers. This is a cheapest and good way to build up brand awareness.
2.3.2 Television Advertisement
Television advertisement is very expensive but this is the most powerful to perform the Tata Nano to the public by demonstrating Tata Nano attributes and persuasively explaining their corresponding consumer benefits. By lower advertising budget, we cannot do the TV advertisement in whole day, so we just choose the prime time (7pm – 11pm) to place the advertisement. By properly designed and executed TV advertisement can improve brand equity and affect sales and profits.
2.3.3 Radio Advertisement
Most of the Malaysians listen to the radio daily. Now a day have many facilities such as MP3, hand phone and so on, is convenience for the people to listen the radio anytime at anywhere, This is a cheap and pervasive medium for us to create the brand awareness by repeatedly listen the advertisement and the brand name. Advantages of the radio advertisement are flexibility, quick response and also more effective media for reaching teens.
2.3.4 Newspaper Advertisement
Beside that the radio, most of the Malaysians also will saw a newspaper everyday. So this is good market coverage. From here, Tata Nano can get the broad acceptance and good reputation from Malaysians. Newspaper advertising is inexpensive.
2.4 Marketing Campaign
This Marketing campaign is base on every four month :
2.4.1 Marketing Campaign for July 2009 to October 2009
Tata Nano will lunch at Malaysia on July 2009. Launching program is very important for positioning which is the act of designing Tata Nano and image to occupy Malaysia in the minds of the target market. Launching program also is one of the promotion strategies to build awareness, through launching at public center Tata Motor will introduce the Tata Nano to market.
In July and August, we focus on marketing campaign which will take place at all the IPTA and IPTS which have organize the convocation, by providing product display and banner; and the peoples can have the experience with Tata Nano by provide the opportunities to drive Tata Nano around the campus.
Theme for this campaign is 'Good future with Tata Nano'. Reason for this marketing campaign is one of our targets are students such as fresh graduate who just get the new job and also the international students. Fresh graduate need the transportation in their working life but they can't afford to buy the too expensive car; international student just need the car which is economy and using it in short period around 2-3years for their student life in Malaysia.
This is cheapest cost by event or campaign in the campus.
In September and October, Malaysians will celebrate two big festivals together, there are Hari Raya Puasa Aidifitri and Deepavali. So we can focus on lower income group with family especially those are come from Malay family or Indian family. Use the mail, telephone, fax, email to communicate directly with them. Base on historical, more of the Malay or Indian will buy the car before festival. 'Raya with Tata Nano' can be the theme for our campaign at this period, and promote them Tata Nano is cheapest and safety.
2.4.2 Marketing Campaign for November 2009 to February 2009
In November and December, Malaysia have the Mega Sales due to Merry Christmas and New Year in the end of the year at whole Malaysia so that have many people will go to shopping.
We can organize the event at shopping centers in Malaysia such as KLCC, Midvalley, Berjaya Times Square, and Sungai Wang by providing product display and banner.
On January and February, most of the employees in Malaysia will get the bonus in this period so the purchasing power will increase. Beside that Chinese New Year is at February. Send the brochures to the small and medium company or office and do the introduction or briefing to them. Follow by mail, telephone, fax or e-mail to developing effective communication.
2.4.3 Marketing Campaign for March 2009 to June 2009
We will do the road show at every state (whole Malaysia). We can have the road show at the center market such as all market at all the state. Have many people will go to market early morning to buy the vegetable, take the breakfast or buy the necessary things. Most of them are women or housewife who may be come from the lower or medium income family. Some of them go to Pasar by motorcycle or by bus. There are our target markets. We can promote Tata Nano to them such as Tata Nano is the cheapest car in the world, Get the Tata Nano to be second car for their family member especially for their children or elder parent, 'Easy life with Tata Nano'.
Housewife or mother can go to Pasar or anywhere by Tata Nano better than motorcycle or by bus for complete their daily matter more effectively. When the women get the news, they will pass this news to their friend immediately. This will help us to promote Tata Nano effectively in the local society. At the road show, people also can get the experience with Tata Nano by have the opportunities to drive the Tata Nano car before purchase it.
3.0 Price
The prices of Tata motors are generally affordable acceptable by
the general public at large. Tata always have something for the lower class people with Nano being their trump card. Giving discount every month and special promotion for certain type of vehicle also one of the strong strategy use by Tata Motors. Discount can be made from
Company’s profit or from dealer’s profit at certain range.
Pricing strategies:
- Penetration pricing
- Low pricing policy with minimum profit margin.
- Though the one lakh price tag is not fixed by TATA group, it was the
word of mouth of people which fixed that range. This expectation
of people creates a big challenge for the company.
3.1 Financial Plan
This section will offer the overview of Tata Nano related marketing activities. It is include, sale forecast, expense forecast, break even analysis and how those relate to the market strategy.
3.2 Break even analysis
Break even analysis indicates that 3369 unit or $ 46,168,776 will be required in monthly sales revenue to reach the break even point.
4.0 Place
Tata Motors has an extensive dealer network covering Indian and
International markets. Wherever you are, there is a Tata Motors Sales
and Service dealership close to you. The channel of distribution, physical
location, and dealership method of distribution and sales is generally
adopted. The distribution of vehicle must be in a very systematic way,
from the plant to dealership and to end user. This is not only in India itself
but also to the world-wide dealership.
5.0 Channel of Distribution Strategies
5.1 Direct marketing channel (zero-level channel)
We perform the Tata Nano in Malaysia by selling it directly to customers. Customers can deal directly with our dealers and make the booking for Tata Nano by visit our sales office or at any special event/campaign. Besides that, customers also can get the information or make the booking via the telephone and through the Internet. By this way we can save more cost and maintain the cheapest purchasing price rather than through retailers or resellers.
5.2 Physical Flow
From the diagram, can know that Tata Nano will send the paths to the Malaysia after received the order from the sales office. After that, we will assemble a car at the workshop.
Finally, send to the customers directly. From here, we can often provide faster delivery to customers because we are closer to the customers.
5.3 Payment Flow
Customers can pay bills by cash or do the financing from bank. Customers pay less by this diagram due to not need to pay extra commission to third party such as wholesalers or retailers. Tata Motor also can collect the payment more efficient.
5.4 Information Flow
Customers can get the information directly from Tata Motor such as new product, price development and so on. Tata Motor can more understanding customer's needs when receiving customers, response calls and mailings or through internet blog. If customers have any need or complaint, we can satisfy them immediately by deal with customers directly.
5.5 Promotion Flow
Marketing Campaign/Event Have two ways of promotion flow, directly and indirectly. Directly are well organize the marketing campaign, event and road show. By this way, we'll promote Tata Nano to target market by face by face and provide the opportunities to them try to drive the Tata Nano. Indirect ways are we will do the advertisement through media such as internet, TV, radio and also newspaper. By this promotion flow, Tata Motor aims to create brand awareness and increase the sales in the Malaysia.