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Jack Trout, one of the world’s leading international marketing strategists has given the Tatas unsolicited advice that they may not take kindly to. At a time when Cyrus Mistry, the new scion at the helm of the Tata group has decided to put his money on souping up the dud - Nano, and repositioning it as a smart city car, Trout wants the Tatas to just ‘kill the brand’.
Why?
Positioning the Nano as a ‘cheap’ car killed it, according to Trout who’s also been roped in by beleaguered microfinance major SKS Microfinance to salvage its brand name.
“The most telling thing they (Tatas) did is calling it a 'cheap car'.People don't want a 'cheap' car, which their neighbours can see. Especially in India, there's a prestige thing about buying a car." Trout told the Economic Times in an interview.
Trout’s observation is fascinating. What he is saying is, first time Indians wanting to buy a car want it cheap, but don’t want it to give the impression that it’s cheap. So, in a country that’s so status conscious, Tatas got the ‘psychology’ wrong as they made the inexpensiveness of the Nano (the world’s cheapest car) its USP!
Others seem to have taken a leaf out of Nano’s branding failure. Ford particularly, has learnt how not to go about luring first time buyers, as it sets to launch the entry level 'Ka' in Brazil.
“In the case of the Nano, one of the lessons for us is be very cognizant of how you position your brand and product,” Mark Fields, chief operating officer of Ford was quoted as saying in the Wall Street Journal. “They kind of positioned it as a step up from a motorcycle. And when people are buying vehicles, it’s a big deal in their lives, and they want to feel like they have made it. That was a real learning we saw and we are factoring in.”
Bajaj Auto, scrambling to get the quadricycle RE60 on Indian roads, meanwhile, has gone on record to clarify how their offering is not similar to the Nano.“The cheaper car, Nano, offers nothing but a lower price; the sales data appear to tell us quite clearly how deep that strategy runs with customers.In the past, the quadricycle proposal was for a cheaper car. This time, Bajaj’s RE60 proposal is for a superior three-wheeler — two diametrically different ideas, but both require the creation of a new category” a Bajaj Auto spokesperson told Business Standard earlier this year.
The Tatas too have accepted that they need to change the way people think about the Nano. "When a person buys a Nano, there are a lot of people who always ask them,'Why? Why did you buy this car?" Delna Avari, a Tata marketing executive told the Wall Street Journal.
But the ‘damage’ has been done according to Trout. The question is, can Mistry’s drive to ‘soup’ up the $2500 engineering marvel,salvage the fate of the Nano?
The jazzed up Nano will come with features such as a power steering, improved looks and will be available in the CNG version. The new top-end Nano LX will cost Rs 2.36 lakh and will be more aspirational than the initial versions.
Analysts have hailed the announcement as positive but "perceptions are hard to change overnight. It's going to take us a while," Tata's Ankush Arora, head of passenger-vehicle business told the Journal.
If the improvements don’t cut it with buyers though, the Tatas will indeed have little choice but to exercise the option Trout is suggesting. The Nano selling a bare 2,000 units per month, far below the 10,000 units that were being sold during mid 2012. The Nano plant is running at just 10% capacity and Arora has said they are ‘not ruling out the possibility’ of using the unutilized capacity at the Nano Sanand plant to manufacture other passenger cars.
