Nano, Premiumization, Repositioning, and Big Cat Is Not Cat It Is Tiger, Stupid

Nano was launched with great fanfare in March 2009. But before its launch, Nano became talk of motor world in almost all corners of the world. Nano cut into news channels and newspapers for something that was considered undoable in automobiles.  Cars or four wheelers were finely segmented in to different clusters on price-performance curve.  Lower performance came at lower price; compare Maruti 800 sitting at the base and BMW or Audi at the center and high performance sports cars on the top like Ferrari or Porsche.  The important point in Nano’s case was it challenged the point at which so called car value curve originated.  Implying for a vehicle to qualify as a car it must have some minimum engine capacity and thus minimum price. This was set by then prevalent  automobile engineering, manufacturing and marketing paradigm. 

Breaking a paradigm is often called ‘out of box’ or innovative thinking. It is critical challenge for many companies to break away from their low performance levels by rule breaking. Therefore innovation is a cherished idea in corporate circles. It is something like questioning ‘why the apple must fall on earth’ again and again. An out of idea when translated into a product and process may win accolades with the technical community of researchers and engineers but fail to ring with market.  For instance a refrigerator with see through door was rejected but designers saw great utility in its ability to convey stock levels of various things without having to open the door. Sony’s Betamx and Apple’s Newton are some other examples.

In a market typically products are clustered along price-performance dimensions. And this clustering is determined both technical or engineering constraints and customer expectations.  Consider bikes or cars or tractors or computers. The engine capacity and price if plotted on a two dimension diagram would reveal distinct clustering (bikes like 100cc, 150cc, 350 cc). A product created out of altering these combinations comes with both opportunities and risks. My best way to exemplify this is to imagine a cat making company in its attempt to expand market goes on to increase its size and it keeps increasing it. What happens beyond a point (on price-performance/power axis) it ceases to be a cat and becomes tiger. And if you decrease its size, again beyond the minimum psychological limit of cat category again it ceases to be cat. Product categorization is purely is a mental scheme by which mind creates ordering and classification to make the external reality manageable.

Each of categories of a product is usually tied up some consumer motives. For instance high power bikes (like Harley, BMW, Hayabusa) tied with dominance and ‘against’ identity. A car per se is a visible or item of conspicuous consumption. It conveys who you are (identity expression, existing psycho-socal group) and it assumes instrumentality in belongingness role (desired psycho-social group). In a consumption society which works on the construction-‘ you are what you  have’ – possessions both give self and social identities. How much would be the desire in people at the bottom tier of market (non car customers) to belong to car buying category (psycho-social group in terms of power and status). They certainly would like to buy a car for its psycho- social significance. They would like to  ‘unbelong’ or ‘disassociate’ from their present group to gain assertiveness and power (in new society the old sources of identity have diminished in their role).  Now consider how Nano fits in this scheme of things.

 

A car which is publicized for being the cheapest car is likely to a contender for accolades in academia and technical circles. This publicity simultaneously invests meaning in the car which renders is irrelevant for the target customers. The vehicle becomes an open display of one’s non-car buyer status. It marginalizes and pushed the owner the car to the bottom of the road power politics. Nano may be an excellent solution to driving in city conditions, but the publicity and hype that made it hog limelight extraordinaire became its own cross.

So what is the solution? Nano needs to break complete away from its price centric perception. Give potential buyers a reason to buy the cheapest car wrapped up in a motive other than price. It can become for instance, choice of smart pro planet people or ‘I am me’ group who buy cheapest car not for price’s sake but for ‘that’s how they are’.  Nano’s new campaign aimed to reposition it, ‘you re awesome’ trivializes the brand. A car is serious product category and people seek seriousness first before emotions of fun. Now BMW is pure joy and thrill to ride but much before this position it established itself as the ‘ultimate driving machine’. 

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One thought on “Nano, Premiumization, Repositioning, and Big Cat Is Not Cat It Is Tiger, Stupid

  1. I think the hype around nano was made by the media as an auto mobile genius at a price Tag of Rs 1 lakh. The famous ‘lakh takiya’ gaadi tag was also given by media. The TATA’s were enjoying all this as they had to spend nothing on advertising budget and were getting full on media attention both India and worldwide. The TATA’s missed on to address the actual TG during all this fanfare.
    The same media attention boom-ranged on two occasions,1. the singrur plant delay caused TATA’s huge loss in terms of actual launch date of the nano for the common masses and the prolonged waiting period started resulting in cancellations of orders and media left no stones unturned in reporting it causing negative branding around nano.
    2. Desperately trying to revive the nano’s positive image the TATA’s tried to rush the manufacturing by trying to assemble it in their Pantnagar plant where they were manufacturing TATA ace. Things did not go well with the first batch of roll outs and subsequent batches which resulted into technical glitches that resulted in the nano’s catching fire on streets. This againg gave the media a piece of news which was negative for the brand image for nano and at the price point, people started doubting the quality of parts and quality of the nano.
    One such incidence was when a customer purchased a nano and it caught fire just after few kms after he drove it out from the showroom and could not reach even his home.
    That was the perfect news item for a news hungry electronic media and they went hammers and tongs about it in the town.
    After that the TATA’s started working on the re branding of the nano which they had never ever made it a Brand in first place as it was a media hyped brand and died the same way by the media.
    Perception of a brand is the ultimate thing in a consumer’s mind. As Tata indica is perceived to be a taxi, no matter how good the features at a lesser price and great mileage it offers to the end consumer. Similarly no one can save the Brand Nano, the Tata’s will have to kill it if they want to save it.
    They should learn from Maruti suzuki which immediately stopped the production of A-star when complaints were reported and now they have re branded it as ‘celerio’ and are launching it.

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