In Branding, calling a cheapest thing ‘The Cheapest’ is obviously a mistake.
Finally Indian conglomerate Ratan Tata admitted that calling Tata Nano, which was famously known as a ‘lakhiya car’, the cheapest car, was a mistake. It has to be. I wondered why he took so long to admit it. I’m sure they must have known it from quite ago.
This is what he said, “It became termed as a cheapest car by the public and, I am sorry to say, by ourselves, not by me, but the company when it was marketing it. I think that is unfortunate,” Mr Tata told a news channel about the group’s subsidiary Tata Motors’ small car.
There were so many talks about this one-lakh rupee car in India, even before its production took place. When Mr.Tata announced that his company has decided to make the world’s cheapest car, people have gone frenzy in talking about it. People have started to anticipate so much about it, that they started saying that after some days all you will see on the roads of India is traffic full of NANOs. People even went to that extent that selling of two-wheelers will start declining because of Nano. I also believed the same.
But my conviction got changed when finally Nano was out in the market, and after a considerable time, there were nothing like what was anticipated. On the contrary, if we look at the statistics, the majority of the people who bought Nano were rich and of upper-middle class, whereas it was made for middle and lower-middle class. Affluent people bought it as an extra car in the family. Most buyers were the 2nd or 3rd time car buyers. And very little number of people were transforming from a two-wheeler to a four-wheeler owners. I know it’s easy for me say now, but then it was crystal clear what was wrong with Nano. That was just one thing, the label attached to Nano, “The Cheapest Car”. No matter what kind of features it was having.
Now, let me elaborate my point why I thought there was a flaw in the Positioning of the marketing strategy. Not just in India, but all over the world, buying the first car for a family is very special moment for them. Before and after the purchase, there is kind of a celebration in the family. Now, let us see, what was the target audience of the car? Middle and lower-middle class of people, right. Now, What is the on-road price of the car? 1.25 lakh to 1.5 lakh. And just imagine, the person has just bought his first car and someone from the neighbourhood comes and asks, ‘oh, you bought the lakhiya-car!’ or ‘wow, you bought the cheapest car!’ Obviously it doesn’t sound good. Rather, he could buy an entry-level car worth 3 to 4 lakhs, without damaging his dignity. Plus, there are very easy financing options available. Why would he buy Nano, and feel bad about himself.
The moral of the story is, if you are targeting lower-middle class of people, you have to be sensible about their self-esteem. You should always make sure that your product should make them feel better for themselves and not inferior. It is so clear to understand it now. Thanks to Tata for giving us this lesson. That was very costly one for them though!