New Product Development Process (tata Nano)

ACKNOWLEDGEMENT

We are thankful to IFIM Business School who provided us with the opportunity for carrying out the study. We would also like to acknowledge my sincere thanks to our faculty Prof. Monica Gupta Under her valuable guidance, constant interest and encouragement, who devoted her ever-precious time from her busy schedule and helped us in completing the project. Her co-operation was not only useful for this project but will be a constant source of inspiration for us in the future. We express gratitude to various faculty members for their valuable guidance which was a good learning experience in order to make my efforts successful. Special, continual assistance while collecting the data was provided by the respondents. We wish to acknowledge our special thanks to them for their help and cooperation in order to complete this project. We are also thankful to those who have helped us intellectually in preparation of this project directly or indirectly. We are deeply indebted to the various sources of information from relevant sites from internet and books which helped us a lot in our study and helped us to learn a lot.

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Contents:

Sr. No.

Subject

Pg. No

1

Executive Summary

3

2

Objective of research

4

3

Methodology of research

5

4

Introduction to development

5

Introduction to Tata Nano

12

6

Tata Nano and new product development

17

7

Some myths about Nano

26

8

Analysis of data collection

31

9

Findings

42

10

Limitations

42

11

Recommendations

43

the

subject

–new

product 6

2

Executive Summary The introduction of the Nano received media attention due to its targeted low price. The car is expected to boost the Indian Economy, create entrepreneurial-opportunities across India, as well as expand the Indian car market by 65%. The car was envisioned by, Ratan Tata, Chairman of the Tata Group and Tata Motors, who has described it as an eco-friendly "people's car". Nano has been greatly appreciated by many sources and the media for its low-cost and eco-friendly initiatives. Tata Group is expected to mass-manufacture the Nano in large quantities, besides selling them in India, to also export them world-wide. The project to create the world's cheapest production car began in 2003, under the Chairman of Tata Motors, Ratan Tata, inspired by the number of Indian families with two-wheeled rather than four-wheeled transport. The Nano's development has been tempered by the company's success in producing the low cost 4 wheeled Ace truck in May 2005. According to Tata Group's Chairman Ratan Tata, the Nano is a 33 PS (33 hp/24 kW) car with a 623 cc rear engine and rear wheel drive, and has a fuel economy of 4.55 L/100 km (21.97 km/L, 51.7 mpg (US), 62 mpg (UK)) under city road conditions, and 3.85 L/100 km on highways (25.97 km/L, 61.1 mpg (US), 73.3 mpg (UK)). It is the first time a two-cylinder non-opposed petrol engine will be used in a car with a single balancer shaft. Tata Motors has reportedly filed 34 patents related to the innovations in the design of Nano, with powertrain accounting for over half of them. The project head, Girish Wagh has been credited with being one of the brains behind Nano's design. The objective of our research was to know about the Potential Customers for TATA NANO. TATA is coming up with its new ‘peoples car’, which will be the ‘cheapest car’ till date. The survey was conducted in Bangalore, with the help of 69 respondents. The findings showed potential customers and the competitors in the market. There were few limitations with our survey and the recommendations are given for a better action to be taken.

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Research objectives o To study about how a new product- Tata Nano was developed based on marketing theory of “new product development.” o To study about what made possible for Tata to develop and produce a car for just Rs. One lakh. o To study the objectives and target customers of Tata’s one lakh car o To study on customers buying behavior and preferences and views about Tata Nano by various methods of data collection.

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RESEARCH METHODOLOGY Sample Design: 69 respondents Sample Composition: • Youth • Service Class • Housewives Field work plans and dates: Geographical Area:

Bangalore

We took Bangalore as our geographical area for research and we started collecting primary data from 24th of November 2008, we visited few of the malls in the city and few industrial areas like KIADP industrial area, Marathalli. We went with the primary data collection till 10th of December 2008. Analysis/ expected outcome plan: We expect that the outcome of our research will show how the market perceive about the TATA NANO

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Introduction To New Product Development Meaning Of Product: E.g.:- milk, computer, shoes, service after sales, railway services etc. a product can be divided into two categories o Tangible goods o Intangible goods Tangible products are known as goods that can be touched, felt and seen. E.g.:- computer, mobile phone etc Intangible products are known as services that cannot be touched and seen as the customer can feel and experience only after utilizing it. E.g.:- service after sales

New Product Development: A product can be considered new under the following situations: New-to-the-world products  New product lines  Additions to existing product lines  Improvements and revisions of existing products  Repositioning  Cost reductions

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Stages Of New Product Development Before the introduction of a product into the market, it goes through several stages of development. These stages are known as stages of new product development. It includes the following: Idea Generation: Companies seek new ideas to enhance the performance of the existing products and to innovate new ideas. This stage is called idea generation stage. There are many sources for idea generation. It may be from customers, dealers etc. Employees throughout the company can also be a source of idea. Toyota claims that its employees submit two million ideas annually over 85% of which are implemented. Companies also find good ideas by researching competitor’s products and services. They can find out what the customers like or dislike about their competitor’s products. Ideas can also come from investors. External research, surveys industrial publications research and development etc. But the main source of idea generation is the customers by their grievances and complains and feedback. However, although ideas can flow from many sources, it is not feasible to implement all the ideas generated due to lack of time and capital. Idea Screening The main purpose of idea generation is to collect a larger number of ideas. However, not all ideas can be commercially viable. Therefore, the companies filter the less viable ideas with the help of systematic process. Companies can use various parameters to screen the ideas such as market size, technical capabilities, potential competition etc.

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Addressing the following issues will also help the companies to analysis the attractiveness of ideas.  Whether the product idea match the existing products of the company.  The degree to which the new product can cannibalize the sale of the existing product.  Company’s ability to produce and market the product.  Buying behavior and the probable changes in the environment. While screening the ideas, an organization may commit two types or errors. 1. Drop error where the firm rejects a very good idea. 2. Crop error where a company selects a poor idea. Concept Testing And Development: All ideas that survive in the process of screening will be studied in details. They will be developed into mature products. At this stage, the idea is submitted for the external evaluation to get a feedback from the market. It helps a firm are organization to collect important information like customers initial reactions towards the product development. During this stage, new product idea is described in the form of one or more benefit that is then presented to a sample of potential customers for their reactions. Marketing Strategy: Following a successful concept test, the new product manager will develop a preliminary strategy plan for introducing new product in the market. The plan consists of three parts.

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 The first part describes the target market size, structure and behavior for the first few years.  The second part outlines the planned price distribution strategy and marketing budget for the 1st year.  The third part of marketing strategy plan describes the long run sales and profit goals and the marketing mix strategy over time. Business Analyses. After management develops the product concept and market strategy, it can evaluate the business attractiveness. Business analyses are the first in-depth financial evaluation of new product to be developed. Here management needs to prepare sales cost and profit projections to determine whether they satisfy company objectives. If they do, then concept can move to the development stage. SOWT analysis will be conducted at this stage by the organization. It also includes the following: Total sales estimation:These are the sum of estimated first- time sales, replacement sales and repeat sales. Its method depends upon whether the product is one time purchase(an engagement ring), an infrequently purchased products like toaster, auto mobile etc. or a frequently purchased products like consumer and industrial non durables. Estimation costs and profits. The R&D, manufacturing, marketing and financial departments estimates the costs. The profitability of the new product is estimated through various financial tools. The simplest technique is the breakeven analysis in which the management estimates how many units of the product the company would have to sell to break even with the given price and cost structure. If the management believes that sales could easily reach the break even number, it is likely to move the project into development stage.

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Product Development In this stage, detailed technical analysis is conducted to know whether the product produced at costs is low enough to make the final price attractive to the customer. Here a working model or a prototype is developed to disclose all tangible and intangible attributes of the product. A product protocol is prepared which is a detailed downiest containing the important attributes that are expected in the product. Once the protocol has been developed, it is handed over to the research the development department to develop the prototype of the product.

Test Marketing: The test marketing is the stage where the product is introduced in a few selected cities. During this stage, the company has to fate the following expense:  High advertisement  High manufacturing cost.  High distribution cost etc. For testing the product, marketer needs to make the decision on the following issues.  The no. of cities in which the product is to be tested.  Geographic location of the cities.  Time to carry ort test marketing

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Through this exercise, company can know the customers response, feedback, suggestions, complaints and any other changes required to be done for product modification. After successfully laughing the product in selected cities the company launches the new product in all other cities. There are certain methods of product testing. Alpha Testing In this method, a group of target audience is selected from the employees of the company.

Beta Testing: It is carried out at the customer’s site. Generally, it is applicable for industrial products where the customization takes place. Gamma Testing: It is carried out on a long term basis where the customers uses the product extensively and gives response after a long period of time. Say six months.

Commercialization: The results of the test marketing help marketers to decide the changes that are needed in the marketing mix before entering into the market. It also helps the marketer to decide the amount of production distribution strategy, selling efforts and other issue like providing guarantees, service after sales etc. the product enters the market during the commercialization stage.

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Introduction To Tata Motors: o

Tata Motors was established in 1945, when the company began making trains.

o

It has its manufacturing base in Jamshedpur, Lucknow, Pune and soon one more plant is going to established at Singur, West Bengal.

o

Product Manufactured - Passenger Cars and

commercial

vehicle o

Installed Capacity - 350,000-400,000 vehicles a year

o

Investment - Rs 2,500 crore (Rs 25 billion)

o

Turnover - $21.9 billion (Rs 967,229 million)

o

Employees - 2,46,000/22001

o

Tata Motors had created the wealth Rs. 320 billion during 20012006 and stood among top 10 wealth creators in India.

Tata Nano - ONE LAKH CAR PROJECT “People’s Car”

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“A promise is a promise,” said Rattan Tata, Chairman, Tata Motors, on 10th January, 2008, when the Nano was first displayed at the Auto Show in Delhi. The Nano project didn’t grab the attention of only Indians; the entire world had their eyes glued to the world’s cheapest car. A truly People’s Car, this time is from India. Though the dealer price is Rs. 1 lakh, the price on road, when it will be launched, will reach around Rs. 1,25,00 but it will be still more affordable and will be more eco-friendly than most other cars giving a mileage of around 23km/liters. The price of the car is such that a lot of rich and HNIs, if interested, can buy the car just by a single swipe of their credit cards. Providing a car worth rupees one lakh car was the dream of the chairman of Tata motors Mr. Rattan Tata. And with high qualified IT skills people he has shown the Indian talents to whole the world.



Idea conceived by -

Rattan Tata



Cost of development -



Manufacturing cost(excluding dealer margin and taxes)-



Development of Design -



Time for designing the car -



Team - A team of 150 engineers , everyone below age 28



Biggest hurdle -

1700 crores Rs 65,000 per unit India 4 years

To make a car cheap car without Compromising design

May western countries as well as many foreign countries have accepted Indian IT skills.

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Details Of Nano Specs: Engine: 624 cc / 33 bhp 4 door, 5 seater (and yes 4 Wheeled too) Rear Engine Weight: 600 kgs Mileage - 22-23 km/liter Variants: Standard Deluxe (with AC) Future: Diesel VariantExports outside India or assembly plants outside Comparison

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8% less in length (bumper to bumper) with respect to Maruti 800 21% more in inner space with respect to Maruti 800 Looks: Front side looks more like Matiz (or Spark as we now call it)Back side looks more like India with those long tail lights. Insight: People often criticize something that is making waves everywhere. This has also been the case with Tata Nano. Competitors, safety regulators, environmentalists and most others conceived the problems that India will face, when such a car is available, much before the actual launch of the car.

This will result into: OLD GENERATION

NEW GENERATION

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SWOT Analysis



STRENGTH



Brand name TATA



Cost price low



Fuel efficient



Safe



WEAKNES



Low power



Not a status symbol



Delay in manufacturing



Limited features

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

OPPORTUNITIES



Large market for selling



Awareness in the market



First car in low range



Can hit in global market



THREATS



Company rival



Not sure to hit in rural and semi-urban areas

New Product Development And Nano As seen before, A product can be considered new under the following situations:

New-to-the-world products



New product lines



Additions to existing product lines



Improvements and revisions of existing products



Repositioning



Cost reductions

As far as Nano is concerned, it falls into new to the world products in the context that it has made a history for the cheapest car ever made without compromising on quality. I.e. best way value analysis.

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It can also be considered as new product in the since of cost reduction as it’s the first time in the history that such a cheap car is produced. The story of the Nano is not confined to its impact on the auto industry. It's a tale that illuminates the India of today—an eager, ambitious nation with a combination of engineering talent, a desire for low costs and value, and the hunger of young managers looking to break from a hidebound corporate environment. Indeed, the team that worked on the Nano—on average aged between 25 and 30—has helped to flatten Tata Motors' stodgy, multilayered management structure, which has resulted in an unexpected side-benefit called "organizational innovation".

Idea Generation And Nano A dream is born – Says, “I observed families riding on two- wheelers -- the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. Add to that the slippery roads & Night time too. It is downright dangerous. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family.” So when Tata Motors needed someone to take charge of the company's most ambitious plan yet to build the world's cheapest car ever Ravi Kant, who by then had become the company's managing director, again turned to Wagh. Wagh remembers what he learned marketing the little truck. "People want to move from two-wheelers to four-wheelers," he says. "Today they can't afford it." More and more can, but Indian car buyers today represent a tiny slice of a potentially giant market India has just seven cars per 1,000 people. India's auto industry has grown an average of 12% for the past decade, but just 1.3 million passenger vehicles were sold in India in the fiscal year ending March 2006. That means a billion Indians buy about the same number of cars in a year as 300 million Americans buy in a month. If four wheels cost as little as two wheels, that could change fast. About 7 million scooters and motorcycles were sold in India last year, typically for prices between 30,000 rupees and 70,000 rupees, about $675 to $1,600. Tata is targeting a price of 100,000 rupees one lakh, in Indian

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terms of measurement or about $2,500 at current exchange rates, for its small car. That sounds impossibly cheap in the West but remains three times higher than India's annual per capita income. The average pay for factory workers at Tata Motors is just $5,500 a year.

Idea screening The next step was the screening of idea. How is this dream possible? What should they make?  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 car made of Engineering Plastics?  A Four wheeled rural car?  Rolled up Plastic curtains in place of windows?  Openings like Auto rickshaws from the side  A four wheeled open car with safety side bars? But the market wanted a car and if they build a people’s car it should be a car and not something that people would say,“ Ah! That’s just a scooter with four wheels or an auto-rickshaw with four wheels & not really a Car.” Trying to build a car cheap enough for motorcycle buyers seems to make sense now but seemed crazy several years ago when Rattan Tata, longtime chairman of Tata Motors and scion of the nation's giant Tata Group conglomerate, first mentioned his dream of building a one-lakh car in 2003. "They are still saying it can't be done," he says, insisting that it can and will. "Everybody is talking of small cars as $5,000 or $7,000. After we get done with it, there will hopefully be a new definition of low-cost."

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Concept Testing And Developing Before starting the project, Wagh did something no one at Tata Motors ever had: He talked to customers. The three-wheeler men inevitably insisted on a cheap, dependable truck that could go from village to market carrying, say, a ton of onions or potatoes, one night, as sunset approached, Wagh stuck with one rickshaw driver. He says, "I kept asking the question. Why? Why? Why do you want a four-wheeler?" Wagh remembered. Finally, he got the real answer. It turned out it wasn't really a problem of transportation of vegetables “If I had a four-wheeler, I would have better marriage prospects in my village," the young man said. Drivers of three-wheelers are looked down upon in India. Wagh realized that four wheels had emotional, not just practical, appeal. Thus the new product was now to be developed. But what type of product? The car to cost Rs. 1 lakh on road.  The car should be built on a different platform than conventional ones.  It must be meeting all the safety and regulatory requirements.  It has to be built on a scale which shall be more than double the earlier launches of similar products and the ramp up must be smooth.  The car has to be designed so that it can be exported to other countries as the domestic demand may not materialize as per projections.  The car must be a beacon for the Indian Automobile industry and prove to the world that we are capable to take any challenge and come out worthy winners. That quest to build the world's cheapest car hasn't ended. The Nano should be available this fall, but the mission began back in 2003, when Rattan Tata, chairman of Tata Motors and the $50 billion Tata conglomerate, set a challenge to build a "people's car". Tata gave an engineering team, led by 32-year-old star engineer Garish Wagh, three requirements for the new vehicle: It should be low-cost, adhere to regulatory requirements, and achieve performance targets such as fuel efficiency and acceleration capacity.

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The design team initially came up with a vehicle which had bars instead of doors and plastic flaps to keep out the monsoon rains. It was closer to a quadricycle than a car, and the first prototype, even a bigger engine, which boosted the power by nearly 20 per cent, was still dismal. "It was an embarrassment," says Wagh. But failure didn’t stop them they quickly realized it was necessary to bring everyone on board, "else it leads to last-minute heartache and delays". Every morning, he would spend an hour or two on the floor of the Pune factory, insisting that everyone involved—designers, manufacturing teams, and vendor development people—be there to accelerate decision-making and problemsolving. Over time, Wagh's team grew to comprise some 500 engineers, an impractically large group to gather on a daily basis. So instead, a core team of five engineers gathered every day at three pm to discuss the latest developments. Each engineer represented a different part of the car: engine and transmission, body, vehicle integration, safety and regulation, and industrial design. The body had to be changed because Rattan Tata, over six feet tall himself, wanted it to be easy for tall people to get in and out of the car. "Imagine the plight of the body designer—he went through hundreds of iterations, then at the last minute the car length was increased by 100 millimeters!" Wagh says. The attention to detail paid off: When the car rolled onto the dais at the Auto Show in New Delhi in January, and Rattan Tata stepped out of the driver's seat with ease, it made an immediate impact. What shook the automobile world most was the fact that the designers seem to have done the impossible: The sleek, sophisticated Nano doesn't look flimsy or inexpensive. If it had been an upgraded scooter on four wheels, Tata still would have been applauded for making a family of four safer on Indian roads. The Nano, however, affords both safety and status. "The innovation wasn't in technology; it was in a mindset change". Business Analysis Cost Since the car had to be built within a cost of Rs. 1 Lac, no conventional design would work as the costs shall be higher and so the entire car has to be redesigned.

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What makes Nano so less expensive can be well understood from the following diagram

The design has to question the need of each and every component from the point of view of its necessity of existence and also the minimum requirements of its functionality. Value Engineering concepts have to be deployed to finalize the minimum requirements.

Disruptive Technology: Is a Technology that brings radical change by introducing new ways of doing things usually at a Technology that is:  Significantly cheaper than existing Technology.

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 Is much higher performing?  Has greater functionality and  Is more convenient to Use.  Brings to market a totally different Value proposition than the one available and can change the Paradigm about a product. The Guiding factor was that the cost has to be minimized for each component yet maintaining its basic functionality. The Alternatives are:  Reduce Consumption of Material being used.  Alternate Suppliers to get same material at fewer prices.  Use alternate materials.  Eliminate use of Material.  Eliminate a process Or a Combination of the above. The design was outsourced to Italy's Institute of Development in Automotive Engineering, but Tata himself ordered changes along the way. Most recently he vetoed the design of the windshield wipers. His solution: a single wiper instead of two, giving the car a cleaner look. THE COST REDUCTION PARADIGM Value Engineering Alternatives: The target was very clearly defined that within the given cost structure of 1 Lac all the components have to be allocated a maximum price and the same had to be achieved using the available alternatives. The Guiding factor was that the tax structure, on materials and manufacturing, must support the final cost of Rs. 1 Lac. The Decisions were: 24

 Establish factory in a tax free zone.  Get the tax advantages on infrastructure development.  Get the suppliers to establish base near the factory.  Get special concessions from State Govt.  In short select a manufacturing location where all the advantages could be achieved. In short select a manufacturing location where all the advantages could be achieved. Total sales estimation Now the question was, “how much to produce”  It was estimated that the demand for the people’s car shall be at least twice the demand for Maruti 800, the lowest end car. Initial projections were at about 500 K cars per year.  The basic reason was the conviction that the target price shall redefine the 4 - wheeler segment.  The price decision of Rs 1 lakh is definitely going to make a lot many people transit to 4-wheeler fold and that shall explode the demand.  F only 10% customers of 9 Million two wheeler market transit to 4-wheelers it shall amount to 50% of the passenger car market share.  It was decided to set up plants with 5 lacs cars per annum capacity and ramp the same up in stages, in line with increase in market demand.

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The initial response to the Nano has been overwhelming and the tiny, Noddy-land car is expected to help the company cross several milestones. With revenues at Rs 1,29,994 crore for the financial year 2006-7, and group companies enjoying a market capitalization of Rs 2,51,487 crore as on January 10, 2008, the Tata Group is on a strong footing, contributing more than 3 per cent to India's GDP. Nano, being the world's cheapest car, has made international players sit up in amazement and the company has received proposals from some African, Latin American and Southeast Asian countries to manufacture the car there. Product Development And finally the product was developed with the following features.  Engine Capacity

Bosch 624 c.c. twin cylinder

 Low capacity, Lighter, sufficient with better Power Rear Engine to reduce the transmission length using a balancer shaft.  4 Speed Manual Gear Box  All Aluminum Engine  Higher thermal conductivity than cast iron, Lighter and so better mileage  Engine Management System by Bosch  Superb control over emission and smooth acceleration.  Dimensions L: 3.1m, W: 1.5m, H: 1.6m  Less length but more inner cabin space due to height. Comfortable leg room.  Independent Front & Rear Suspension McPherson Strut in Front & Coil spring & trailing arm in rear.  Better ride than Maruti 800.

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 Single piece ribbed steel body with safety features such as crumple zones, intrusion resistant doors, seat belts, strong seats & anchorages.  Safety requirements are adequately met.  Single Wiper in place of two.  Cost effective yet functionality is met  Tube less Tires  Weight reduced by 2 Kg. Cost reductions 200 Rs. And in line with modern vehicles  Instrument console in the centre  Elegant to look at and can be used both in Left Hand & Right hand version.  The list goes on and on.  The Final verdict THE CAR COSTS Rs 1 lac Test Marketing And Commercialization Nano is soon going to launch by the end of April. It will be commercialized in whole of India. It is mostly targeted to the middle class and lower middle class people. The effects of Nano and its commercialization will be soon known after it comes into the market.

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SOME MYTHS ABOUT NANO When Nano was introduced, it surprised everyone. It had so many features but the cost was as low as Rs. 1 lakh. This was really amazing. Due to this, many competitors, governments and others opposed Nano. Moreover, it’s not a new thing that whenever a new concept is developed, people oppose. They find more limitations then seeing the benefits. Following are some myths about Nano. But these are then proved to be wrong. Myth no #1 Nano is an unsafe car  The car has an all steel body.  It meets the mandatory Frontal Impact requirements. 28

 It also meets the Side Impact requirements although they are not mandatory in India. Myth no #2 Nano will greatly increase the Pollution Level  The car is Bharat IV and Euro IV compliant although these norms, which are stricter than the present Bharat III norms, are yet to be introduced.  It has lower carbon footprint, 20 mg / Km of Carbon Dioxide emission as compared to 45mg / Km, emitted by most of the two wheelers.  Its Multi Port Fuel Injection system is controlled by an intelligent Bosch Engine Management system which controls the combustion cycle precisely to ensure compliance to all emission norms.

Myth no #3 Nano will struggle to perform  Although the car has 33 bops as the maximum horsepower it has a low kerb weight of 550 Kg and so has a higher power-to – weight ratio when compared to many existing cars running on Indian roads.  The car has a matching acceleration to Maruti 800 and also a good top speed. Although the manufacturers have estimated 90 Kms as the maximum speed the car can go up to 105 Kms per hour top speed. Myth no #4 Nano has very little leg room  Although the car is 8% smaller than Maruti 800 it has lot of extra leg room at front as there is no engine compartment. This also leaves sufficient knee room at the rear.  The car has a tall boy type design so there is lot of head space and also enough Shoulder room.  The mono volume design and the wheels having been put at the corners have freed up lot of in- cabin space and although the car may be registered as a four-setter, three slim adults can sit comfortably at the rear. 29

Myth no #5 Cheap means Uncomfortable  More comfortable than some of the cars selling at even twice the price. Leaves sufficient knee room at the rear.  Easy to get in & out of the car because of perfect seat height from the ground.  Suspension systems are good and the trailing arms with coil springs are not found in cheap cars. Rear. Myth no #6 It’s very difficult for a rear - engine car to work.  Rear engines work in many cheap as well as expensive cars.  Auto-rickshaws at one end and Formula One cars on the other extreme all use rear engines.  Maruti Omni too has a rear engine, under the seat and no one has been burnt due to that.  Cooling is easier in Nano as compared to some vans and there are the air ducts on either side behind the edge of the doors, which allow air to seep in for both cooling & for intake. Myth no #7 There is a shortage of storage space.  There is some storage space although not much.  The rear seat with parcel shelf folds to allow accommodating a large suitcase.  Small articles can be placed under the bonnet also. Myth no #8 Cutting Corners is evident everywhere  Cost cutting is done by smart designing rather than taking out the essentials.

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 One wiper has been taken out but the functionality is intact. Wind shield washer fluid jets are mounted on the wiper itself rather than the body.  Wheels are held by three bolts instead of four.  On the contrary, MRF tubeless tyres and all Alumininium engine, have been used, which are more expensive than conventional ones.

QUESTIONAIRE Date ___________

Q. No._______

Dear sir/madam, We are doing a brief survey to find out more about consumers perception about TATA’s new people car “TATA NANO”. We would be grateful if you could spare a few minutes to participate in it and we assure that this information taken will be purely used for academics purpose only. Thank you for your cooperation. Questions 1. What do you own presently? Car

Bike

Other

2. If car then, what type of car do you own?

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Small

Sedan

SUVs

Premium

3. If bike then, what type of bike do you own? Economic

Premium

4. In car which brand do you own? (Please specify brand model) Maruti Suzuki: ___________________________ Hyundai: ___________________________ Tata: ___________________________ Ford: ___________________________ Mitsubishi: ___________________________ If not any of these please specify: ____________________ 5. Do you intend to buy a car in next 1 year? Definitely will buy May or may not buy not

probably will buy probably will not buy

definitely will

6. Will you be interested in buying TATA NANO car? (If “yes” go to Q.no:7,if not go to Q.no:8) Yes

No

7. What intended you to think to buy NANO in future? Price mileage maintenance safety service If others please specify _______________________________________________ 8. What intended you not to buy NANO? ______________________________________________________________________________ ______________________________________________________________________________ _____________________________________________ 9. What do you feel about TATA NANO will perform in the market? Highly successful Unsuccessful

Successful neither successful nor unsuccessful highly unsuccessful

10. What do you perceive TATA NANO in terms of safety? Definitely will be good May or may be good not be good

probably will be good probably will not be good

definitely will

11. Do you think TATANANO will increase traffic problem? 32

Yes

No

Personal details Name: __________________ Age:

21 - 25 41 – 45

Sex:

Male

26 – 30 46 – 50

31 – 35 51 – 55

36 – 40 56 – 60

Female

Occupation: Self employed Monthly Income: Less than 15000

Service 15000-20000

Student

Housewife

20000-25000

above 25000

ANALYSIS We planned to start the analysis part by flow of question in the questionnaire 1. What do you own presently? Car Bike Other

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ownpresently

Valid

Frequency car 26 bike 17 car and bike 19 others 7 Total 69

Percent 37.7 24.6 27.5 10.1 100.0

Valid Percent 37.7 24.6 27.5 10.1 100.0

Cumulative Percent 37.7 62.3 89.9 100.0

From the 69 respondents 26 of them owned only car which is 37.7%, 17 respondents owned only bikes, contributed to 24.6% and there were 19 such respondents who owned car as well as bikes, contributes to 27.9%, 7 respondents were there who didn’t had a car or a bike, who traveled in bus or in autorikshaw or owned autorikshaw. 2. If car then, what type of car do you own? Small Sedan SUVs Premium

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Type of car

Valid

Missing Total

Frequency 21 12

Percent 30.4 17.4

Valid Percent 46.7 26.7

Cumulative Percent 46.7 73.3

SUVs

9

13.0

20.0

93.3

Premium

1

1.4

2.2

95.6

1

1.4

2.2

97.8 100.0

Small Sedan

small and SUVs Small and sedan Total

1

1.4

2.2

45

65.2

100.0

System

24

34.8

69

100.0

The car owners were asked to specify there car, i.e. class wise. This showed that maximum were the small car owners and contributed to 46.7% of the total.

3. If bike then, what type of bike do you own? Economic Premium

35

Type of bike

Valid

Missing Total

Frequency 17 21

Percent 24.6 30.4

Valid Percent 44.7 55.3

Total

38

55.1

100.0

System

31

44.9

69

100.0

economic premium

Cumulative Percent 44.7 100.0

The bike owners were asked to categorize their bikes in two categories namely economic and premium.

4. In car which brand do you own? (Please specify brand model) Maruti Suzuki: ___________________________

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Hyundai: ___________________________ Tata: ___________________________ Ford: ___________________________ Mitsubishi: ___________________________ If not any of these please specify: ____________________

Interpretation When the car owners were asked to specify the brand, as known Maruti holds the major market share, 19 respondents owned Maruti, 10 respondents owned Hyundi, 6 owned Tata, 3 owned Ford and 10 owned different brand cars.

5. Do you intend to buy a car in next 1 year? Definitely will buy probably will buy

May or may not buy

37

Probably will not buy

definitely will not

Intend to buy a car in next 1yr

Valid

Frequency 9 22

Percent 13.0 31.9

Valid Percent 13.0 31.9

Cumulative Percent 13.0 44.9

may or may not buy

13

18.8

18.8

63.8

probably will not buy

10

14.5

14.5

78.3

def will not buy

15

21.7

21.7

100.0

Total

69

100.0

100.0

definitely will buy probably will buy

When we asked the respondents weather they will be buying a car in coming one year, we got a very mixed up response, where 13% of the respondents said thy will definitely buy a car, and 21.7% said they will not be buying a car. The rest were not sure with yhere decision.

6. Will you be interested in buying TATA NANO car? (If “yes” go to Q.no:7,if not go to Q.no:8) Yes No

38

Interested in buying TATA NANO

Valid

yes no Total

Frequency 35 34

Percent 50.7 49.3

Valid Percent 50.7 49.3

69

100.0

100.0

Cumulative Percent 50.7 100.0

A straight question, will you be buying “TATA NANO”, we thought that we would receive a good positive response, but to our astonishment, the response was almost 50/50.

7. What intended you to think to buy NANO in future? Price mileage maintenance

safety

service

39

What intended you to buy TATA NANO

Valid

Frequency 18 5

Percent 26.1 7.2

Valid Percent 51.4 14.3

Cumulative Percent 51.4 65.7

price,milage,service

1

1.4

2.9

68.6

price,milage,mainten ance

1

1.4

2.9

71.4

price,maintanance

1

1.4

2.9

74.3

price,milage

6

8.7

17.1

91.4

price,milage,maint,se rvice,safety

1

1.4

2.9

94.3 100.0

Price price and service

price,safety Missing Total

2

2.9

5.7

Total

35

50.7

100.0

System

34

49.3

69

100.0

35 respondents were willing to buy TATA NANO, and the major factor was PRICE, which inspired them to think for TATA NANO. 8. What intended you not to buy NANO?

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______________________________________________________________________________ ______________________________________________________________________________ _____________________________________________ Most common answers given for this question are: 1) Size, Safety, and Performance 2) Price and Status 3) Traffic and Not need

Interpretation The people who were not aware about TATA NANO’s specifications they were saying about size, safety and performance. Persons who were from high income group were saying about price and status. The middle income group people who are qite satisfied with the public transport said I would increase traffic problem or its not needed at this point in their life.

9. What do you feel about TATA NANO will perform in the market?

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Highly successful Unsuccessful

Successful highly unsuccessful

neither successful nor unsuccessful

What do you feel about TATANANO will perform in the market

Valid

Frequency 11 33

Percent 15.9 47.8

Valid Percent 15.9 47.8

Cumulative Percent 15.9 63.8

20

29.0

29.0

92.8

unsuccessful

3

4.3

4.3

97.1

highly unsuccessful

2

2.9

2.9

100.0

69

100.0

100.0

highly successful successful neither successful nor unsuccessful

Total

On the success matter when we asked them 63.8% of the respondent said that TATA NANO will be a success and 7.2% said it will be unsuccessful, where as 29% of the respondent were clue less.

10. What do you perceive TATA NANO in terms of safety?

42

Definitely will be good may be good Probably will not be good

probably will be good

May or

definitely will not be good

What do fell in terms of safety

Valid

def will be good probably will be good

Frequency 10 19

Percent 14.5 27.5

Valid Percent 14.5 27.5

Cumulative Percent 14.5 42.0

may or may be good

15

21.7

21.7

63.8

17

24.6

24.6

88.4

8

11.6

11.6

100.0

69

100.0

100.0

probably will not be good def will not be good Total

42% of the respondents had faith in Tata and said the car will be good at the safety parameters, where as 37.2% of respondents felt that it will not be good at safety parameters.

11. Do you think TATANANO will increase traffic problem? Yes No 43

Will increase traffic problem

Valid

yes no Total

Frequency 47 22

Percent 68.1 31.9

Valid Percent 68.1 31.9

69

100.0

100.0

Cumulative Percent 68.1 100.0

There were only 31.9% of the respondents who said it will not increase the traffic but rest of them felt that it will increase the traffic problem.

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Findings After the study of various aspects we found that – Nano Car Is Definitely Not For: Someone looking for better performance.  Someone who is looking to impress somebody.  Someone who wants to speed trial on Sunday

 Someone who is looking for long drives. But Nano Car Is Defiantly For –  Someone who is looking to buy a car but cannot afford much price.  A students who want to go college, tuition instead of bike etc.  Someone who depends on second hand car.  For a house wife who can buy a car with her own savings.  Someone who depends on scooter. So Nano is not a basically a luxury cars but it can fulfilled the all capacity for middle class people. Impact Of Tata Nano On Life Of Common Man  In India every one can afford a Nano, just as we buy any electronic appliances for a home uses.  Decrease in price of second hand car.

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 High traffic on roads due to sale of exceeds car on roads.  Increase in loan on car installments.

Limitations As every research have its own limitations, so as we had and they are as follows: 1) Survey conducted in a small geographical area, in Bangalore. 2) Research conducted on the response of the 69 respondents, which cannot correctly represent the population.

Recommendations As per our findings we have some recommendations, which will be useful when TATA NANO will be introduced in the market. Advertisement and Publicity should be done very strongly, not only by price tag but also by showing the technical specification, this will help in, 1) NANO will be visible in the market. 2) Help in converting the potential car customers to brand customers. 3) Will give strong position in the market to stand against the stronge competitor 800.

Maruti

Tata has succeeded in value engineering of the product and its great success for tata’s. It’s something on which India can feel proud of. Nano has been developed effectively.

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REFERENCES 1. Kapil Lamba

[email protected] 2. Marketing Research done in second term at IFIM B School. 3. www.wikipedia.com.

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