Updating the Tata Nano marketing plan

The Tata Nano was launched in India in 2009 under the marketing theme of 'world's cheapest car' with a target market of people (particularly families) who had never owned a car. Its positioning was supported by basic auto features and a low, low base price. Tata's CEO told the Guardian, 'Here in India we see four people travelling by motorbike ... I thought they could travel more safely by car'. Tata was so overwhelmed by orders that it instituted a lottery to select the first buyers.

Now the Nano's marketing plan is being revamped - again - after lower-than-expected sales and reports that the car failed to meet minimum UN auto safety standards. Apparently, many consumers don't want to drive a car with such a low-price image.

The Nano wasn't the only tiny car to fail crash tests, by the way. The other four made-for-India cars that rated zero on a safety scale of 1 to 5 were: Maruti Suzuki Alto 800, Hyundai i10, Ford Figo and Volkswagen Polo. Without air bags, these no-frills autos couldn't pass the crash tests, even though they all meet India's safety guidelines.

Scientist Raghunath Mashelkar, who is on Tata's board of directors, blames poor marketing for the Nano's poor results (and Tata's former CEO agrees). Mashelkar says: 'The Nano is such a great product, it has 86 patents. So, excellence should have been put at the front, and affordability at the back'. In other words, the Nano should have been positioned on the basis of innovation rather than low price.

For the new marketing plan, Tata is positioning its Nano Twist as a car with style and excellent fuel efficiency. The marketing reflects a target market of young couples and features fashion colours and extras such as power steering. Low price is not the primary message. Will the new marketing plan reignite Nano's sales in 2014?