Creating a New Brand for New Market - Case Study Example

The Tata Nano car has a space of 5 persons and has a duffle bag. Apart from all these features and benefits offered by the car, it is being promoted as a part of one of the biggest brands of India, Tata. Tata has already high share and in the vehicles industry of India for around 70 years. The company has developed strong brand equity by supplying low-cost and quality products with innovations to compete with the international market.

Tata is considered to be the ideal developer of the cheapest and most fuel-efficient car in the mass market of India as they have the advantage of 65 years of market experience and brand loyalty in the vehicle sector. For this reason, the company has made a huge investment in this Tata Nano project. Other competitors do not have brand loyalty as Tata in the target market and for this reason, have been reluctant to make huge investments in any new project. Tata takes the first-mover advantage because of which Tata is the market leader today in the cheapest vehicle customer segment.

Question # 2:
Most of the international countries including the EU are concerned about the environmental effect which will be generated by the launch of Tata Nano. The most important effect is pollution which will be increased because of the excessive use of Tata Nano by consumers, as a result, there will be a high consumption of fuel and hence high emission of carbon gas would take place. This in turn will cause several diseases. Apart from this, when a huge quantity of cars will be launched every year it will make the traffic-congested inroads which in turn will cause traffic jams, hence creating daily routine problems for people.

In response to all these environmental concerns of international countries, Tata justify their Tata Nano as a low pollution emission car as compared to other cars and they considered the car as an alternative to motorcycles and scooters. Tata Nano would create a bit more pollution than motorcycles and scooters but it would improve the living standard of the middle-class sector. The people of India gives preference to Tata Nano because a major part of the population of India lives in rural areas and facing difficulties in traveling on motorcycles and scooters with their families, so Tata Nano will be a great alternative for them to use the car for business purpose and for family use also. Hence this car is beneficial in both aspects.

Question # 3:
The other companies would be concerned because Tata will supply their Nano product in a very large segment of around 50 million potential customers. Along with this the company already has high brand equity and loyalty in the mind of the consumers. For this reason, all other vehicle producers have been highly concerned with the situation. The launch of Tata Nano will directly affect the Bajaj motor's low price and consumption vehicle. At the same time, many producers of motorcycles and scooters will also be affected by the production and launch of Nano production.

With a huge production plan of Nano, Tata motors can introduce this vehicle in the international market also because they are bearing a very low cost of production. Along with this, the company has a high brand image in the international market as one of the oldest producers of vehicles with quality products. Tata Nano would offer customers in foreign countries a low price car option as it would cost around the US $2500 which is the cheapest among all cars.

Question # 4:
With the commencement or penetration of this cheapest vehicle into the huge segment of middle-class people of India, it creates very strong brand loyalty, the car is selling with a named as people’s car. Tata has got a very good reputation as a vehicle producer in India and producing quality products for around 67 years and maintaining their quality standards by completely satisfying their customers and actually delighting their customers. By introducing this car Tata Nano the company is targeting a very large market and will attract large number of customers. It will create a very good image in the customer’s mind and it will create credibility because of strong brand equity in the vehicle market. As Tata enjoys large market share and have been able to attract more and more customer, so the company will have a very good opportunity of introducing more products in the same industry and become a market leader in Indian car industry. Read More