Marketting Management Essay

Submitted By Kirangowdas1
Words: 7796
Pages: 32


“The car that changed the world”


1. Introduction 4

2. Tata Nano: Customer Perceived Value 5

3. Value Proposition offered by Tata Nano 9

4. Value Proposition offered by Maruthi 800 14

5. Tata Nano Vs Maruthi 800 15

6. Improving Value Proposition offered by Tata Nano 18

7. Implementing new value proposition internally & externally 21

7.1 Influencers of Internal & External Marketing 24

8. Summing Up 25

Appendix 27

Bibliography 35


Figure 2.1: Interpreting Value 5

Figure 2.2: Determinants of customer delivered value 6

Figure 3.1: Value Proposition Builder 9

Figure 3.2: Indian Market share based on vehicle category 10

Figure 3.3: Company market share of passenger vehicle manufacturers in 2007 12

Figure 3.4: Company market share of passenger vehicle manufacturers in 2009 12

Figure 5.1: Tata Nano and Maruthi 800 14

Figure 6.1: Creating and Delivering Value Proposition 18

Figure 6.2: Competitive Advantage 19

Figure 7.1: Porter’s generic strategies 21

Figure 7.2: Strategic relationships and networks 23

1. Introduction

Tata Nano is the world’s cheapest car presently. Conceived, manufactured and owned by Tata Motors Limited, Nano has become a revolution in the economy segment of automobile industry across nations. Tata Motors own a variety of cars ranging from low end Nano to high end Land Rover and Jaguar series. It is the largest automobile company in India and was established in 2000. It is a leading company in the commercial & passenger vehicles segment, world’s second largest bus manufacturer and third largest truck manufacturer. Nano is being sold in India predominantly but marketed world wide. With the advent of Nano during late January 2008, a stage has come wherein a common man can afford a car. The “1 Lakh Car” as we call it is cheap, easily available and stylish. But the real question lies in whether or not Nano is worth the price every customer pays for it? Does it provide the quality and purpose that customers in this segment are looking for? I would like to address these questions and analyze the perceived customer value of Tata Nano through this study. I will also be looking at the value proposition which the company offers to the customers through Nano and possible ways to improve the same.

2. Tata Nano: Customer Perceived Value

All customers have expectations from a product when they buy it from the vendor. The expectations depend on the price, product choices and the manufacturing company largely. Whether or not these expectations are met forms the crux of the term “customer perceived value”. It is a dynamic measure which differs with each individual or customer.

Customer perceived value can be defined as “the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives”. It is based on the difference between what the customer gets and what he/she gives for different possible choices. (Source: Kotler P & Keller L.J 2006)

In simpler terms Value = Perceived Benefits – Perceived Price. The graph below (Figure 2.1) displays the optimum value which can be delivered for a given price.

Figure 2.1: Interpreting Value
(Source: Piercy, 2009)

Normally one analyzes the customer perceived value by looking into a product’s overall effectiveness. The manufacturer would be able to adapt the product with respect to the customer’s expectation for better sales. Through this way the concept of customer perceived value not only serves an individual in making a decision on buying a product but also help companies to make the product more