Thursday, January 17, 2008

The Blue Ocean that Nano swims in

Ratan Tata unveiled the realisation of his dream and his promise to India at the Auto Expo last week. The Tata Nano is all that he had promised, it is compact, doesn't compromise on style, gives brilliant mileage and sticks to the magic figure of Rs.1 lakh.

My take on the Nano:
1) It should be targetted towards three sections of society. Firstly, it should target young families-couples with 2 young children who till now could not afford a car and thus have been driving precariously on their Bajaj Scooters. These are the people who will value the car as it will protect their children from the harsh weather and also give them a status symbol in their community. B-towns would be the best place to target this group.

The second section it should target are parents of college students. Parents are ready to shell out Rs.40000-70000 on two-wheelers for their children but are constantly worried about their safety. The Nano will be a safer option and will also not allow very high speeds.

The last section is retired people. Their need is a car that is low in maintainance, should not guzzle fuel and should not be too heavy to drive. The Nano will give them all this at a very affordable rate.

2) Critics are sceptical of this launch with the logic that the Indian roads are not yet geared for such an increase in 4 wheelers. Frankly, this is a wake-up call for the government. A growing economy means that the consumer has more choice at affordable rates. But providing the infrastructure for him to excercise this choice is a task that the government needs to take on and fast.

3) Though Auto Rickshaw and cab drivers are looking at the Nano as an alternative, Tata Motors should avoid this at any cost. Once a car becomes associated with a public transport vehicle, its perception doesnt allow retail consumers to flaunt the same. Indica and Qualis are good examples of this.

It is very easy to be critical of this car. It's only 624cc, the wheels are too small and thus cant take rough roads, it doesnt have boot space and on and on. But think of this from the perspective of that middle aged supervisor who needs to drop his children to school in the rain or from the perspective of an aged couple who have to brave public transport as 2 wheelers are too dangerous and 4 wheelers too expensive for them. Ratan Tata has done something phenominal here...he has caused a shift in the market scenario. Instead of competing in the red ocean where all the big sharks are busy outdoing each other with new luxury cars, he has gone and created a new market itself. This, my friends, is the best example of Blue Ocean Strategy in our times.

1 comment:

Anand Agrawal said...

yaa i agree thtt nana is an examle of BOS.........its price mileage and more leg room speace thn its closet competitor ie maruti 800 are some of its usp.....

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