Marketing plan of Tata Nano for UK market

Marketing visualize of Tata Nano for UK food food martTata is mavin of the biggest rail thoroughf ar elevator railroad rail elevator railway railroad auto manufacturing business in India. Last year they do put up Nano which is the cheapest private cable simple machine in the b alto quiverher. It is around Rs 1,000,000 which is 1452.53 approx. Mr Ratan the ch tenorman of Tata Ltd inform Nano model which a common nerve class Indian loafer afford it easily and they c eached it as the Peoples Car. Nano was darted India 1st April, 2009. It was pass judgment to be on road in July of the same year. It framed a buzz in 2008 when it was firstly aimn in an auto exhibition. People were so excited on the open up that on the first twenty-four hour period of booking it received 5500 booking.The question arises, what hold ups Nano so affordable and cheap? Answer to this question Tata made it part lighter, lower-rankinger, took altogether the shal paltry parts and chan ged with come out compromising the safety and fulfilment of environmental factors. gibe to Windecker (2005) these situation gives an idiom the power of friendship of different cultures. In which small-scale toll cars select given towering first choice e veryplace luxury, SUVs and sports cars. The latest trend has shown that down(p) set cars be to a greater extent in demand than the others even in the foodstuffs exchangeable US and UK. The Tata should be focal point on the UK mart. The curtilage behind selecting UK grocery as the primary patsy mart is the status of India as a reasonable means in the market UK Automobile market has the probable dynamics, potentials and communication similarities which atomic number 18 payable to do an Indian ships comp each in the UK. The other potential markets that ar to be chooseed ar USA and Russia. USA is one of the largest markets in the world countries but the reason for non considering US market as discriminative is because feature requirements be very high and some non tariff obstacles which get along it slightly harder for a raw competitor to go into this market. The other reason is because the markets take aim of due date, experience and competive pressure is quite high. On the other make in Russian market, thither were several factors high taxes on the young competitor etc which do not support an international company like Tata. This reason makes it less eye-catching than the UK market. The main beingness the development of the pastoral is quiet tentative and dealers market is under certain.The 3 models Tata Nano available in the market. Tata Nano, Tata Nano CX and Tata Nano LX. All the parts of the models of Nano go away be imported to coupled ground by Tata Industries. The car put up be assembled by the factories in Halewood and in Northwest England. Tata Motors already suck in dealers in East Kent Audi in Kent and livid May fair Audi in Greater London. Tata bear dow n word distribute Tata Nano cars by these distribution centres tho.2.0 SITUATION ANALYSISTata Motors Limited is arguably Indias largest automobile familiarity it has revenues of over Rs. 1600 crores last year. Its Commercial vehicles atomic number 18 largest selling vehicles, and as healthy(p) it is be in aggrandisement three in the passenger vehicles part. Few of Tata vehicles as well as won the prizes in last three geezerhood. Another large contract was made by Tata regarding their progress in the passenger vehicle segment. In January 2008 Tata announced that, The company would release a $2,500 car that could replace the locomote scooters commonly apply in developing countries to car around all in all families (Carty, USA Today). The company is fourth largest truck and the second largest bus manufacturer in the world. Tata Motors also acquired intersections UK based car scratchs Jaguar and Land spider in March 2008(BBC News, 2008).Ratan Naval Tata (Chairman of Tata Group), insist the consume for an intention like Nano is because of the nature of the market and transport of the unpolished. In India availability and quality of mass transport are study chores. The two seated cycle is normally considered to be a family vehicle in India, Even though motorcycles are quite dangerous mode of transporting for a family. So with this in mind Tata Nano was created as a safer form of transport. (Pradeep Thakur, 2009)3.0 Market Summary The estimated be of cars on the road of United Kingdom much than 28 million, as per the field of study to a greater extent than 35% of the car on the road are low cost vehicles. The price of such low price cars are estimated about say 4500 to 4812, which is almost 3 times higher than the price of TATA Nano.( Svend Hollensen, 2010)3.1 Target MarketsIdentifying the scrape market for launching any crossroad is necessary. So Tata hand over recognise the pass up income group with family, students, first time vendees in general young population, and used cars buyers as their potential target market.3.2PositioningThe greatest USP of Tata Nano is that it is the worlds cheapest car while being eco friendly as well. The company arrest not compromise the quality and safety of the car while making it cheapest car. By leveraging Tata Nanos competitive edge the positioning of the harvest john be achieved industries Tata Motor who has been in vehicles industries (commercial, passengers utilities) since 1945 is already an experience butterflyer in the automobile market. Tata motor has hot transactionhip with more than 100 components suppliers( Jagmohan Raju, 2010).3.3 GeographicsTata Motors has targeted the urban area market such as London. Because agree to the survey more than 60% of cars running in London are in lower price range. Secondary, the presence of Asian Comm building blocky in London, Tata is a historied name in automobile sector in India. That flush toilet play the fact tha t the market Tata is come in is not entirely natural and it already have brand recognition.3.4 Distribution reviewTata Nano leave behind be positioned as an affordable car in overseas markets same as it was through in Indian market.. The car will be assembled at pre-defined locations as the Easy to assemble kit will be imported from India. The proposed locations are Northwest England and Halewood. Its redistribution to showrooms can be make on regional basis. more than than 40 sales events events offices will be opened throughout United Kingdom.3.5 Competitor reviewThe main competitors are Volkwagen, Renault, Peugeot, Toyota, BMW, Citroen, Ford, GM (Vauxhall), and Honda. As per the SMMT statistics, top Companies in selling cars in United kingdom are as follows4.0 SWOT Analysis4.1 StrengthsThe first and foremost strength is that the car has low price, stylish, high give the axe efficiency and environment friendly (Green House). Tata as company is already a cutn brand in the world which can create enough brand sense in people to consider the harvest. The response of the car was very heart warming in the country of launch which increase the company turn over as well as the trading wage.WeaknessThe main weakness of the product is pretermit of luxury quality. And mere perception of the people because of the price of the product. The sophisticated buyer will feel that the product is not worth buying because of its price. The product is not technologically advance and the execution is average in analyse to its competitors.4.3 Opport social unitiesThe product is relatively new. So in this case it can create an luck to Tata. As Nano is a nice specimen of Innovation. This is also an opportunity to the company to enhance its global presence. The market demand of lower price cars can also be an opportunity for the company launching the cheapest car in the world.4.4 ThreatsThe major threat will be the competitors like Ford and GM. Their product Ka and Astra respectively are already major players in the market. The unpredictability of fuel price can also be seen as a major threat. The change of legislations and unlike policies can also partake the plan of Tata. The other threat face by the company can be the oil crisis, recession etc.5.0 Pestle Analysis5.1 Political fit to Hormazd sorabjee, a top indian car journalist, Tata Nano is the most eco friendly and politically acceptable car ever launched in the market. It is expected that Nano will advance the automobile industry globally for have direct model in its price range. Other automobile manufacturers like Volkswagen have already shown liaison by announcing their plans for a model of lower price range. But the constitute will be slightly more when the factors like tax and manufacturing be will be taken into account. The market will be surely affected by the increase in the oil price cod the global economic unsteadiness which can also be a major factor. Any increase in the o il prices will affect the sales of luxury car, as it will surely go down. Mintel in 2006 stated because of this issue, an increase in the level demand has been developed towards the car with smaller engine with fuel effieciency. According to KPMG, 2004 Administrative barriers which quality meets and operations requirements are not to be overlooked and a higher emphasis will be given to all safety measures and spark level which will result in increase in production lives. Because of which profit margin on the product will devolve. Mintel, 2006 stated that the increase of vocation on the road of UK can increase the threat of high might overload. Hill in 2002 stated in his article that the political relations between countries of operations can also be the factor which can affect the company. For example if India will cooperate with the UK within the government form _or_ system of government of favourability the UK government can leverage in tariff and non-tariff barriers which can make the entry for the company in UK market easier.The foreign ownership regulations (The market expansion mode (Hill, 2002) the government has remove some regulatory control from large numbers of industries which includes automobile as well. This means that it is up to the foreign companies to choose their mode of expansion the UK according to their preferences.5.2 EconomicStrategies of pricing and potential profit on investment are the major issues that affect the on-going as well as the future market growth. These factor are to be considered while selecting a market. The UK market is viewed as a very mature market (Mintel, 2006). According to the present scenario the market is estimated to reach the survey of 31billions. But the boilersuit UK market is experiencing negative growth due to the maturity level of the consumers. Nevertheless due to the impact of certain factors like society and technology the car segments with lower price range have long growth prospects.Minte l (2006) claims that on that point is a of import decrease in the effrontery of new cars consumers. The decrease in the rate of GBP has created various confusion for manufactures consumers run in pounds. The cost of labour in the automobile industry highlighted, the cost factor and capability of direct and indirect cost becomes one of the cay issues in maintain advantage. According to the opinion of the industry specialists (KPMG, 2004), the issue that will influence the decision selecting the location the most is the cost of labour. According to the survey (KPMG, 2007), a major importance is given by the company on the cost of labour which can is describe cost of their retirement fund, healthcare and their legal service. The growth of present political and economic boundaries for example European Union, all European Union markets are now considered as a single EU market. This political policy can attend to Tata motors for entering in various European markets like Italy and F ranceAccording to estimations of Nieuwenhuis Wells (2003) the European Union attracts the companies as the target market for a car manufacturer will remain high. They claim that the EU as a target market will be maintained to attract the manufacturers because of the increase of its market value and size.5.3 Social FactorsDemographic factor is one of most pregnant social factors. It affects the risk taking nature, spending power, consumer trends, lifestyle, and value per guest. The change of demographic trends bears the company to construct a plan which suites the particular product. The current demographics have gradually weakened the sales of family cars in the UK. Lifestyles The change of lifestyles and habits of the consumer can have a direct impact on their expenditures Mintel (2006) also pointed out that in UK recent increase in the culture of having two or more cars in the family. Mintel (2006) adds that the negative effect of market development and increase in the price s of oil is challenge by the impact of change in the lifestyle of the masses. Thus, on the contrary, Tata Nano will experience healthy growth despite a plunge in the sales of automobile in the UK. Because our target market will be the high population of students and female drivers in the country,5.4 proficient FactorsThe doors for new transactional options are open by the rapid growth of net in the market. Currimbhoy (2004) suggests that because of the constant growth in the areas of technology, like in the go acrossle of communication and digital technologies have formed new opportunities such as e-shopping, new convey for selling and new tools of marketing research. According to Mintel (2006) the problem in increase in capacity can be tackled by the using e-shopping by the leading car distributors. The growth in the channels of e-exchange between agents will be able to benefit the supply range of a function strategy of the company.5.5 Environmental FactorsAs per the UK m arket, Tata Nano is made environmental friendly, Tata also has exceeds measures for rule standards on safety and pollution. The aim is to make Nano an eco-friendly car for the masses. As per the UK standards the car has been modified by replacing the seatbelts, glass, light, tyres and engine. Speed in miles, Indian road are on klilometre. Accordint to Data monitor, 2006b the car subjected to undertake government authorised crash tests and is also has to undergo an overall inspection. Then only the car is given approval for sale. After these all inspections the price of the car is expected to increase (Datamonitor, 2006b)6.0Porters Five Forces6.1 Competitors bargaining powerThe UK is highly consolidated automobile market. The rivalry is between Ford, GM (Vauxhall), BMW, Volkwagen, Peugeot, Toyota, Renault, Citroen and Honda. Because of presence of powerful and establish competitors a requirement of product differentiation has been created. According to Mintel (2006) the tough emu lation in the market introduces a significant price pressure and requires increasing overall advancemental costs. The manufacturers had to close certain plants to cut the costs and survive on the market because of the present market conditon. At the moment, the major competitive strategies are new product development, an improvement in supply chain and above all serving the needs of emerging market segments (Mintel, 2006). The emerging requirements demands extremely high level of responsiveness towards operational.6.2 Buyers bargaining powerIn the UK market the buyers experience very strong bargaining power because the intensity challenger on the global scale is high and overcapacity issue UK is always on the rise. According to Mintel (2006) A high level of bargain seeking demeanor is shown by the buyers.6.3 Suppliers bargaining powerEven though Automobile manufacturers have consolidated forming large entities they do not make a significant shift of bargaining power in OEM-supp liers relations. According to Veloso Kumar (2002) a integrating of different supplier groups is gaining because of the OEM sector. The sections like demand chain partners and large car dealers are experiencing bargaining power because of the overcapacity.6.4 Threat of substitutesApart from direct competition from public transport, the major competition for automobiles are other transport services like taxis. One of the major substitute threats are the second hand cars market.According to Mintel (2006) the steady accumulation of second-hand cars has become one of the major reasons of the dramatic fall of the sales of new cars.6.5 Threat of New EntrantThe threat of new entrant is minimises because the level of entry barriers like conlosidated industry, RD capability and well developed value added chain are quite high. Nevertheless, because the industry is much globalised, the pattern of new entrant is not that clear-cut, new geographical markets are entered by existing manufacturer s. Datamonitor (2006) also states that there is not enough measures introduce by EU countries to protect the market if the Chinese manufacturers tried to flood EU markets in the future.7.0 Marketing Mix Strategy7.1 Product Review in that respect are three variants in the Nano range Nano, Nano CX and Nano LX only when the Nano CX variant would be introduced in the UK Market for the first showTata Nano LX will introduced in the UK Market during the avocation yearThe car has achieved its low price by minimizing costs on unnecessary luxuries, the primary Nano comes without front and rear fog lights, with a heater or air conditioning, with anti-lock brakes, only one single windscreen wiper, manually operated windows, manual direct with no air bags, tiny 12 wheels, plastic body parts joined with adhesive instead of more conventional metal and join and a two cylinder 623 cc engine that provides a enormous maximal speed of 65 mph (around 105 km/h).Among the features of the car are7.1 .1 Stylish and comfortableThe figure of speech for Nano is made designed by taking a family in mind, has a roomy passenger compartment with unstinted leg space and head room. It can comfortably adjust four persons. Four doors with high seating position make the people to have more leg and head room.Yet with a length of 3.1 metres, comprehensiveness of 1.5 metres and a height of 1.6 metres, with adequate ground clearance, it can effortlessly organise on busy roads in cities as well as in rural areas. Its mono-volume design, with wheels at the corners and the power train at the rear, enables it to unequivocally combine both space and manoeuvrability, which will set a bench mark among small cars (Pradeep Thakur,2009).7.1.2 Fuel-efficient engineNano has a rear-wheel drive, all aluminium, two-cylinder, 523 cc, 33 PS, multi point fuel injection petrol engine. Two-cylinder gasoline engine with a single hemp shaft is used for the first time in any car. The design answers the car to mi nimise weight, which results in maximising performance for consumed energy and delivers high fuel efficiency. The electronic engine management system controls the performance of the car.7.1.3 Meets all safety requirementsThe current regulatory requirements are all taken in consideration in the case of Nano. Nano actually exceeds all safety measures. It has a strong passenger compartment because of an all sheet-metal body, seats belts, intrusion-resistant doors, crumple zones and strong seats.7.1.4 Environment-friendlyTata motors are known for manufacturing eco friendly in Indian Market. Nano is not different it has tailpipe emission performance exceeds regulatory requirements. Nano has a lower pollution level in comparison to all two-wheelers being manufactured in UK today. The car has low carbon dioxide emissions because of the high emission, thereby benefiting in two an affordable expatriation solution with a low carbon footprint.7.2 BrandingBy help of branding the consumer can identify manufacturer of a product and them to send the feed of the products performance to the concern manufacturer or distributor. Branding creates a different identity in the products and services from the other. The main task of branding strategies is to convince the consumers that there is a meaningful difference among brands in the product category. In the case Tata Nano, corporate name is combined with products name for the rice beer of branding. Tata is fourth largest heavy vehicle manufacturer in the world, and it is a undecomposed strategies to cash in the brand value of the manufacturer.7.3 Product StrategyThe Tata Nano CX model will be first introduced with a 3 years warranty. The next Tata Nano LX model will be introduced in the following year, because Tata as a brand will be established by then. For all marketing campaigns the brand and logo will be displayed everywhere and on the car as well.7.4 Pricing StrategiesThe Cost price is an estimated GBP 2, 420 or equivale nt to INR 174,903, which includes import tax, sales tax, duties excise assembly cost and lode costs. The prices show a strategy by which shares can be taken from more settled competitors.7.4.1 Setting the price selecting price objective lenssMajor three objectives of Tata should be for an effort to position itself in the UK Automotive market. The objectives are Survival, maximum current profit and maximum market share.7.5 SurvivalIntense competition from UK second car manufacturer, Perodua for a share of the automotive market segment for the below 1,000 cc category will act as an fillip fot Tata Nano. It will ensure that the car covers variable costs as well as some fixed costs. Survival in the case of Nano is a short term objective as in the long run.7.6 upper limit current profitTata in UK will set a price that will maximize current profits, cash flow and return on investment, after taking into consideration the demand and costs involved. Because the category of small foreign cars has not been really tested by other manufacturers, and then the demand is rather difficult to estimate but Tata Nano for having a effective response towards its entry into the UK market.7.7 Maximum Market ShareTata is set to launch low price for a new car in localize to attract a maximum number of buyers and a large market share by will implementing the market-penetration pricing in the UK. The cost can be decrease by achieving high volume of sales. This will allow the company to further decrease the price of the product. In the UK car market the low price prodices more market growth, this show the high esthesia of the market. Tata is also confident that as sales increases the production and distribution costs will also fall. By this Nano will help to keep out competition and maintain its low-price position. The low-price entry will provide all Perodua consumers to have a best alternative.8.0 PROMOTION STRATEGIES8.1 Objectives of promotional material StrategiesBefore deter mine 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 a UK and increase the sales quarterly. Tata Nano is very new for UK, they feel fresh with this new brand and theory of this car. Tata Nano will get into market in 2010.Brand awareness and concept/knowledge of this new car should be the companys first and foremost objective for promotion. Tata Nano burst into the worldwide market in the short time because of being so cheap. The advert and organize the event or campaign in sufficient detail to establish the adept brand attitudes should be done properly because Tata is still new to UK market. For creating a strong brand uprightness awareness of brand is very important.The second objective should be view through the medium of knowledge. The comparison between Nano and other cars which are more expensive and are not afforded by everyone can approve to be a good marketing t ool for Tata Nano. in any case that the scheme of 30 days money return guarantee will also be introduced for the promotional purpose We can also have a 3 years free maintenance scheme for Tata Nano like other major car manufacturers8.2 Advertising ProgramThe main aim is to inform UK market that Nano is the cheapest car in the world. Create an understanding in the consumer to buy Tata Nano not just because its cheap but also its safe, useful, all in good quality and also environment friendly by developing an denote program.8.3 Online AdvertisementThe online advertisement should the first step taken by the company. Tata Nano already created a Web site www.tatanano.com on March 2009 for a good communication with the concern consumer. In the Web site, all the details of the car and company with images and videos are provided to nodes. This can be a good strategy to bring the consumers close to the histpry of the company so that they can be more satisfied. In addition to images and videos, the website also has a links which shows the public feedback of Nano.Besides that, Blogs have become an important for searching any major breeding you require. Blogs is best place where people of same interest can converse their issues and concern. By establishing a blog network a company can easily monitor the feedback and even can look for the potential new consumer. Blogs and Internet are at present the best and cheapest way pf creating brand awareness globaly.8.5 Television AdvertisementTelevision is expensive mode of advertisement but its ia also very powerful as product is in full explained and secondly the product get an image by exposing it to television. Tata can show Nanos attributes and persuasively explaining their corresponding consumer benefits. The company should lower advertising budget and should only air the advertisement on national channel between 7 to 11 pm. A good advertisement always creates a need in the consumer mind which increases brand equity a s well as improve sales.8.4 publisher AdvertisementBeside the television, most of the UK reads newspaper every day because of the fact there are around 10 newspaper companies circulate it for free. So this can be a good mode for market coverage in a big city like London. Newspaper advertising is also not so expensive.9.0 Channel of Distribution Strategies9.1 commit marketing channel (zero-level channel)ManufacturerCustomersTata Nano in UK can sold promptly to its concern customers. By visiting the sales office or any special event the customer deal right off with the companies dealers for booking. Besides that, there should be a 24X7 customer care centre from where customers can get all the information they want for booking a new Tata Nano and there should be a 24 hrs attendant on the website who can blurt live with the customers and give information about the product. These all motifs can help us eliminating the middle men from the chain which will surely decrease the variab le costs.9.2 Physical FlowTransporters,WarehousesTata Motor at IndiaAssembly shopAt UKCustomersFrom the diagram, we can understand that as per the basis of demand the car will send in parts from India and will b assembled in the workshop in the UK can know. The final step is to send the product direct for the customer collection.9.3 Payment FlowTata Motor at India bargain OfficeAt UKBanksCustomersBanksCustomers can have two option of pay the bills either by cash or by bank. Because of this diagram the customer will be pay less because the cost of commission of the middle men like retailer and franchise are not include in the flow chart. It is also good for the Tata Motor because the payment will be collected more efficiently.9.4 Information FlowTata Motor at India sale OfficeAt UKCustomersInformations like product, price development and so on can be given direatly by Tata motors to their customers. And by the help of various services like response calls and mailings or through int ernet blog, Tata can identify the need of the customers. The complaints of the customers have to be dealt directly. So that customer will be fully satisfied at the end of the day.9.5 Promotion FlowMarketing Campaign/EventTata Motor at IndiaSale OfficeAt UKCustomersMediaHave two ways of promotion flow, directly and indirectly. Directly is well organize the marketing campaign, event and road show. By this way, well promote Tatanano to target market by face by face and provide the opportunities to them try to drive the Tatanano. Indirect ways are we will do the advertisement through media such as internet, TV, radiocommunication and also newspaper. By this promotion flow, Tata Motor aims to create brand awareness and increase the sales in the UK.10.0 Financial PlanThe overview of the Tata motors will be done in this section. The major financial aspect like disbursement see, sale forecast, break even analysis and their relation to the market strategy are included in the section.10.1 boom even analysis go to pieces even analysis indicates that 3369 unit or 28,615,563 will be inevitable in monthly sales revenue to reach the breakeven point.Table Break Even AnalysisBreak even analysis periodic unit break even 3369Monthly sales break even 28,615,563Monthly unit production6083Average per unit revenue8,492Average per unit variable cost5,550Average per unit fixed cost1,630.11 Estimated monthly fixed cost9,916,91510.2 sales forecastSale was done with qualifying of seasonal factor and is on quarterly basis. Graduation month was used as seasonal factor to adjust our forecasted sales because our primary targets are the graduation students. There is an increase of 10% sales yearlyly according to the forecast, graph given below represent the sale forecast.Figure Sales Forecast10.3 Marketing Expense ForecastMarketing expense forecast provides an indication about when our marketing plan has to be modified and it also keep marketing department focused toward their goal. Advertisement, marketing campaign, direct marketing and other are all the major categories in which the expensed are bring in down. The marketing budgeting is quite necessary for most of the companies from it affect the total sale of the quarter. In 2010 Tata motors believe that marketing expense will not be more than 4 percent of total sales.11.0 IMPLEMENTATION AND CONTROLThe idea behind the marketing plan of Tata Nano is to show the current standing of the company. The performance of the company can be improved by observing following areas of the companyMonthly and annual revenue of the companyMonthly and annual expenses of the companySatisfaction of the customersA 10 percent growth in the annual sales of the company11.1 Marketing OrganizationThe main righteousness of a marketing manager should be taking control of all marketing activities. Marketing manager will designate all the promotional and advertising responsibilities to his juniors. Sales performance will be the respons ibility of the sale manager. The entire department will be work under the counselor-at-law of marketing director11.2 Contingency planDifficulties and risksOne of the difficulties that will be face by the company