CAN AN AWARD-WINNING INNOVATION OFFERED AT BEST PRICE BACKED WITH HUGE RESOURCES AND A RENOWNED BRAND NAME FAIL?
It sounds like it cannot, right? Rather such a product which offers intrinsic value, is
innovatively enjoying a first-mover advantage in the market, available at a budget-friendly price and having a good brand name can win a huge market share. It looks like a win-win situation. It was indeed but the product still did fail.
This is the story of one of the biggest dream of Mr Ratan Tata, his dream car TATA Nano.
STRATEGY WANTED - BEAT THE LOW-COST COMPETITOR WITH THE HELP OF THIS CASE STUDY.
WHAT IS THE STORY?
The Tata Nano was the dream project of Mr RATAN TATA, the Chairman of TATA Group, (a $19.5 bn group). Tata ranks 86th among the 100 most valuable global brands (Source – Business Standard, 2019).
Ratan Tata, a man with a vision to create a car so cost-efficient that every household in the country can afford it. The world wasn’t even imagining that a car can be available at such a price. People throughout the world were claiming that it is not possible. But as it is said that Impossible is nothing, Ratan Tata proved it again and launched TATA Nano for $1600, a price similar to the price of an iPhone.
The car was getting viral on social media and news channels without any marketing effort. It was hyped throughout the world as THE WORLD’S CHEAPEST CAR. It was listed in the Guinness world record and even Barack Obama on his visit to India appreciated it.
BUT WHEN EVERYTHING LOOKS GLOOMY, WHAT WENT WRONG?
There’s a catch. Though the car was getting popular throughout the world by default, the attribute used in there was of being CHEAP. The biggest problem that lies here is that marketing happened by default and not by design. People started considering it as a cheap and unreliable product. And even when the car was offering value, was available at the best price, it failed.
The car in India has an aspirational value which was missing in the product positioning of TATA Nano. It couldn’t place itself anywhere in the four quadrants of value proposition except for the price. As in India, a person’s success is judged by the car he/she owns, hence a good car showcases that the person is successful in her life and vice-versa. The team failed to deliver the required values that were demanded by its target audience.
WHAT ARE THE LESSONS LEARNED?
To market your product well, Understand the value proposition (it means the promising company offers or we can say easy to understand the reason why a customer should buy your product) of your product or service and thereafter position it in the market in such a way that it not only fulfils the needs and wants of customers, but the positioned value is acknowledged and positively considered by the target audience. And lastly, communicate your values effectively and in a designed manner.
It is equally important to understand who your target audience is, what are their needs and wants, with what promise they expect to be served (financial, emotional, relational or performance value). Segment your audience if you find disparities among your target audience.
HOW CAN I APPLY IT IN MY BUSINESS?
At Strategy Wanted, we want to help you with practically applicable content.
Hence, the best application of these theories would be to beat the low-cost competitor.
A low-cost competitor can, of course, take some market share from you, but the percentage of market share it captures from you would depend on your value proposition and market positioning of the product. Not every customer is price sensitive, but no customer would like to pay a premium until the value is clearly expressed and is acknowledged by them. Hence, it is important to differentiate your product and hit the customer exactly at the right point.
Contact one of our specialists at Strategy Wanted to understand more about how to choose the right target audience, how to create a customer-oriented value proposition, how to position your brand and how to communicate it. We are happy to help you.
--------- Strategy Wanted ---------
Email - email@example.com
Contact - +91 9812495200