NEW PRODUCT DEVELOPMENT PROCESS

TATA NANO The Peoples Car

New products are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New product doesn t mean that new to the world. It may be additions to existing product lines or improvements and revisions to existing products or repositioning or cost reductions .

The idea was generated by Mr. Ratan Tata when he observed families riding on two-wheeler, the father driving the scooter , his young kid standing in front of him , his wife seated behind him holding a baby . It led him to wonder for such a car which is safe and affordable to any middle class family .

The next step was the screening of idea . Several alternatives were: A scooter with two extra wheels at the back for better stability?  An Auto-rickshaw with four wheels? A three wheeled car like a closed auto- rickshaw?? A four wheeled open car with safety side bars? But the market wanted a car and if they build a peoples car it should be a car and not something that people would say, Ah! Thats just a scooter with four wheels or an auto-rickshaw with four wheels & not really a Car.

Concept used for Tata Nano were : The car should be built on a different platform than conventional ones. It should be low cost , achieve performance targets such as fuel and acceleration capacity and will be a four-wheel version of auto-rickshaw . It must be meeting all the safety and regulatory requirements. The car must be a beacon for the Indian Automobile industry and prove to the world that Tata is capable to take any challenge and come out as worthy winners. At testing stage , concept was tested with a group of target customers.

The marketing strategy development involved three parts. The parts focused on target market, sales and profit goals. Tata s initial business plan consisted sales of 2 lakhs car per annum . The second part involved product price distribution and marketing budget strategies. Tata fixed Rs. 1 lakh as the car price.

 Selecting a manufacturing location where various advantages such as tax free zone , suppliers base near the factory , special concessions from State Government etc. can be achieved .

 Total Sales Estimation

It was estimated that the demand for the peoples car shall be at least twice the demand for Maruti 800, the lowest end car. Initial projections were at about 500,000 cars per year. The basic reason was the conviction that the target price shall redefine the 4 - wheeler segment. If only 10% customers of 9 Million two wheeler market transit to 4wheelers it shall amount to 50% of the passenger car market share. It was decided to set up plants with 5 lakh cars per annum capacity and ramp the same up in stages, in line with increase in market demand.

Finally the product was developed with the following features:

 Top speed 105kmph  Mileage 20km/litre  Dimensions - L: 3.1m, W: 1.5m, H: 1.6m  Engine Capacity : 2-cylinder, 624 cc  Multi point fuel injection petrol engine.  Low capacity, Lighter, sufficient with better Power Rear Engine to reduce the
transmission length using a balancer shaft.

 Less length but more inner cabin space due to height.Comfortable leg room.  Single piece ribbed steel body with safety features such as crumple zones,
intrusion resistant doors, seat belts, strong seats & anchorages.

 Single Wiper in place of two  Tube less Tires

 Tata Nano  

was commercialized in the whole of India. It was mostly targeted to the middle class and lower middle class people. The Nano was first displayed at the Auto Show in Delhi on 10th January , 2008 . The Nano's overall marketing strategy was to use conventional media in an unconventional manner. No TV campaign, only innovative use of print, radio and other media, particularly the web. The campaign of Tata Nano was to be cost-effective and innovative so that Nano becomes synonymous with anything "small, cute and brief.

 The basic Tata Nano Std priced at Rs. 123,000

The Deluxe Tata Nano CX at Rs. 151,000 has air conditioning. The Luxury Tata Nano at Rs. 172,000 has air conditioning, power windows, fabric seats and central locking. The Nano Europa, European version of the Tata Nano has all of the above plus a larger body, bigger three cylinder engine, anti-lock braking system (ABS) and meets European crash standards and emission norms.