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The BIG must-learn lessons from Tata Nano's failure.


Now that Tata Nano is on its way out, its time to learn lessons from the brand's fall from grace. Back in 2014, I had warned about the brand's re-positioning move. I had then said to wait and watch. The watching and waiting is over. Let the lessons now begin.

Here are the 4 BIG ones!

1. The 'Solution' lesson - The best of brands know they are in the business of solutions not products. To get this right, businesses have to abandon the engineering mindset, one that's focused on building products, not solutions. 'Frugal engineering', once described as the powering force behind the Nano miracle stands exposed today. Frugal cuts back on spending, thus cutting back on building a solution. All frugal engineering does is build products that work. That is just the default limited job done, and that's not good enough to step into solution territory. To me, the Tata Nano was more a 'product' than a 'solution'. You see, buyers don't give a whit to products, they seek after solutions. 

2. The 'Value' lesson - An extension to the solution lesson, value is about what consumers seek and desire. Understanding value in its entirety requires businesses step outside the limiting confines of viewing value only as utility. You see, value is way beyond mere utility. Value encompasses elements that are sociological and psychogenic in nature. Meaning, consumption has social and psychological contexts to it. A car is as much about a 'place in society' as it is about transportation. Again, a car is as much about persona exhibitions as it is about mobility. Stepping into such zones of value is seeing value in its entirety. Unfortunately for the Tata Nano, its delivery of value was merely utilitarian.

3. The 'Competition' lesson - An assessment of value by consumers is never an 'absolute' one. In fact, value assessments are arrived at in a 'relative' fashion, in a competitive marketplace. No buyer considers a car brand for purchase without pitching it against other brands. When such comparisons happen, what may seem like value to the seller, may not be the 'best' value to the buyer from among the choices he/she has. The Tata Nano may have scored on the price parameter vis-a-vis competing brands, but on every other element of value it under-performed. Buyers thus found better propositions in budget cars, and they were willing to pay a higher price.

4. The 'Positioning' Lesson - Many times marketers tend to believe positioning is only about marketing communication. Dead wrong. Positioning is about occupying a distinct space in the minds of consumers using every possible marketing stimuli available. In theory, that means all marketing mix variables. The Tata Nano tried to advertise its way into positioning itself. It just didn't work. First, the brand ran Ads to appeal to families, and when it didn't do the job, it used Masaba Gupta and the 'Twist' avatar to appeal to Indian youth. Again, it failed. What happened was that every other stimuli, including the product itself worked at crossroads to what the Ads were trying to portray. Truth be told, the unappealing looks of the product, to its lack of status value negated everything advertising was trying to pitch. Such a pity all that advertising effort was wasted dollars.

The lessons of the Nano fiasco are gargantuan ones. Learn it so you don't makes the same ones again. Dismiss it, and the misfortune that may follow for sure won't be nano-sized! 

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