Running Head: TATA NANO
A Case Study of Tata Nano
The inspiration behind Tata Nano Car
Tata Company is one of the largest automobile firms in India, and the recent development
of Tata Nano is considered to be a customer-desired offering. Ratan Tata, who is the chairman of
the company, was the man behind the idea after he witnessed a family of four squeezed on a twowheeler on a rainy day. The thought was to provide such families with a more secure and
affordable four-wheeler car that would serve the needs of those in the low-income category at the
bottom of the pyramid (Singh & Joshi, 2015). After its development, Tata Nano would cost
about $2,200, which would reduce the switching cost from the two-wheeler to a car
The insight towards the development of Tata Nano was that one must first understand the
economic status and the needs of the target customers to help build a car with features that the
consumers desire. The target was the lower middle class that is rising at a higher rate in India.
The Nano car had addressed various characteristics of the middle-class Indian families. For
instance, it had considered the price, comfort, fuel efficiency, and also safety measures that
customers would consider before purchasing the car. According to Erying (2011), there are many
things that one must consider before developing and bringing a product like the Nano car into the
market. For instance, one must ensure that people will like it, identify the people that will want
the product and understand how people will use the product.
Innovative steps in the design of Tata Nano to ensure Low Pricing
The design and development of the Nano car were as a result of the focus on innovation
to develop a product that will attract those in the lower economic class. According to Singh &
Srivastava (2012), innovation is crucial since it is a creative way of helping firms address the
issue of market saturation and promote competitiveness.
In an attempt to ensure Tata builds an inexpensive car, the firm started by understanding
its customer needs. In this case, the company did not set the pricing based on the production cost
as done normally. Instead, the form set the target selling price and developed the car backward.
In this case, engineers had first to identify the essential features that consumers want in a car and
develop innovative ways to ensure they are acquired at low cost to align with the target price.
Also, the firm had to ensure that it does not sac...
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