Case Study Tata Nano

Secondary Data
Nano was ranked last among small cars of entry-level segment in terms of customer satisfaction according to a study by market research firm TNS ( '2010 Fourwheeler Total Customer Satisfaction' ). The best-selling model of Maruti, Alto topped the entry level small car category, followed by Omni and the Maruti 800 followed.
One of the major scenarios currently is that the expectations from the bottom end cars are rising. The owners of Tata Nano expect enhancements in terms of design and Maruti 800 owners expect better servicing, according to the survey. Alto scored 91 points whereas Nano got only 70 and was placed last.

Macroeconomic Picture
As the Nano was evolving around 2003, the Indian economy was on a boom, also leading
Initially, Tata Motors did nothing unique to communicate the pride of owning a brand-new Nano. They went in with the assumption that customers would walk in and get swayed by the affordable price. Additionally, there were several issues with the method of allowing customers to pre-order the car. The customers were asked to pay the full amount of the car upfront without the option of having a test drive for more than six months. The option of providing a test drive was virtually non-existent. Tata Motors only provided a specially designed simulation game to provide the customers a feel and experience of the car. In the period from June to August 2009, Tata Motors received a lot of cancellations on pre-orders which amounted to more than half of the original short-listed
Customers had to pay up-front on their own, and then walk out with a delivery promised for six months or more. It was only later that the engagement with banks began and later its own finance company began providing financing options for the car.
Promised price: Rs. 1,00,000
Price of lower end Nano: Rs. 1,23,000
Price of high end Nano: Rs. 1,70,000
By October 2010, there was another hike to the price of the Nano due to an increase in the price of the raw materials. Thus, the rising material cost was passed on to the consumers. In addition, questions were raised about the size of the car raised and also about its durability and power, even though it designed to be more spacious than Maruti 800 (Nano had 21% more interior room than Maruti 800 even though it was 8% shorter in length). Doubts were raised about the capability of the car, with respect to its ability to handle the rough or non-existent roads in the rural areas and also if the engine had to be rested at frequent intervals to improve durability. It also faced valid fears as to whether the car would crumple in an accident as it did not have enough front or back room. On the other hand, the level of customer awareness also paid a major role, as the Nano was targeted for rural areas with low awareness levels and two-wheelers