In 2009, Tata Motors, one of India's leading automobile companies, launched the Nano, a car priced around 2500 dollars (or INR 100,000), about half the cost of its nearest rival. It was known as “the cheapest car in the worldThe company's website crashed because it was accepted 40 million hits in a short arc, which he could not handle.

Buying a car in India was a luxury back then. For context, the number of cars in India per breath was significantly less than in the United States—about 20 in India versus 800 in the US per 1,000 population. While the Indian passenger car market saw 1.4 million units sold in 2008, the then lowest priced car Maruti Alto sold 230,000 units, almost 15% of the entire market. As a very cost-sensitive population, Indians flocked to motorcycles, with 8 million Units sold in 2008. Thus, cars at the lower end of the price range were competing with motorcycles and not necessarily just other cars.

The launch of the Nano was prompted by Dad the rattan, Chairman of the Tata Group, who promised a car priced at INR 100,000 (or INR 1 Lakh). Tata zeroes in on this price point, as it is one symbolic benchmark in India, and then to its engineers to build a car that can be sold for this price. He believed that the Nano would democratize car ownership and make the dream of owning a car affordable to a whole new segment of society, especially those who would otherwise have bought motorcycles.

It is estimated that Tata Nano can expand the Indian car market 65%. But the Nano succumbed – the maximum sales ever achieved were 75,000 units in 2012, with sales declining rapidly thereafter. In fact, in February 2019, only A The Tata Nano was sold across the country, and Tatas stopped car production in 2020 in general.

This was a costly disaster for the Tata Group that holds many valuable lessons for marketers.

So what positioning lessons can we learn from the Nano?

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1. Don't overlook your customers' emotional motivations

When you're positioning your product, you need to really understand your consumer and theirs emotional needs. For Indians, car ownership was a matter of pride, not just utility, and buying a car was a sign that one had arrived in soCiety. This is critical to understand. The previous cheapest car in the market, Maruti Alto, was a very successful car and bought by hundreds of thousands of Indians, but it was never advertised as the cheapest car in the market.

No one who wants to signal to society that they are doing well in life would want to be associated with the “cheapest car in the world.” But, wittingly or unwittingly, this is unfortunately how the Nano was positioned and a colossal mistake emerged. As a marketer, you need to fully understand yours customer motivations as this is the key to positioning.

2. Remember that price often implies quality

Indian consumer preferences had evolved over time: Quality was also a critical element in car buying decisions, not just price. They also associated low price with low quality. In this case, the extremely low price of the Nano was a signal of its quality and consumers interpreted the price of 1 Lakh to mean that the Nano was a poorly built car. Reports of the Nano catching fire did nothing to help that perception. In practical terms, the car produced only 36 horsepower and a top speed of 65 mph.

While lacking many of the things one would normally expect in even the cheapest automobiles in Western countries, such as air conditioning, the price point called into question whether the car's build had been compromised and whether the car was safer than, say. , a motorcycle. So be aware of what your price point may inadvertently pass it on to your customer.

Connected: How to define your product and set your prices

3. Don't try to be everything to everyone

When launching any product, it's important to be clear determine and understand your target audience – this brings an important focus to your positioning approach. A well-defined market allows a marketer to tailor messages to better resonate with the target consumer segment. In the case of the Nano, it was never clear who the Nano was for. Was it to replace the motorcycle for commuting? Was it an aspirational first car for a young driver? Or was it a second car for a wealthy family? Trying to cater to everyone, the Nano failed to connect strongly with any specific customer segment.

4. Respect your marketers research

Even when a company's top executive is leading a product launch, it can still be valuable to listen to your marketing manager, who will be closer to consumer sentiment, market research and brand pitfalls. Visionary leadership must be balanced with sound marketing strategies that combine consumer psychology and positioning.

When Ratan Tata chose the price point and drove the product model around price, he unwittingly took away some of the most important leverage that Tata's marketers had. The marketing managers at Tata Motors could not influence the positioning at all. The fact that Tata announced all this publicly, well in advance of launch, meant that marketers had no control over messaging and how the product would be perceived. So, as a business leader, respect the opinions of your marketers.

Connected: 5 steps to position your brand for maximum success

In conclusion, the failure of the Tata Nano provides essential insights for marketers and highlights the importance of understanding your customers' emotional motivations, price and quality perceptions, clearly defining your target audience and respecting your marketers' research. By keeping these positioning lessons in mind, you can ensure that your next product launch is a success.