3.1.1 The 4Ps market mix
Any product that can satisfy a customer wants and offers value , or delive the way the customers wants it and at the right time is worth developing it. New project development (NPD) requires new techniques or strategies to meet market dynamics. The 4P mix model emphasis on the importance of managing innovation in any marketing process (Dame, 2019). Also, managing and employment of marketing mix elements are essential in handling the procedure.
The NPD brings considerable profits if the new product is introduced to the market at the right time, at the appropriate price, and to the target group. However, it’s not guaranteed that the NPD will result in profits (Gürbüz, 2018). Therefore, management should establish the market they are looking for, types of the products the company is offering, if to product is new in the market or to clients. Tata Nano was one of the company’s major innovation which is analyzed as follows;-
Price – The price for Nano was announced to be 1lacs (which was approximately $2,000) excluding transportation costs and VAT. However, the advertised price was increment due to slight modification that increased the input cost (Tata Motors press release in October 2010). Also, the company incurred a high amount of production; this proved futile to a customer’s expectation. The costs for Nano and other models targeting low-income earners were high compared to the country’s per capita income and the purchasing power (Kalla, 2015).
Product – Tata Nano was a very highly anticipated product, which was meant to bring millions of lower-middle-class Indian families to the automotive market. Also, Nano was meant to appeal to current riders of motorcycles. The car was safety to families who ride in four or five to a bike in dangerous Indian roads. Nano is a four-wheeler trunk car. The development, as guided by management, was meant to provide safety and affordable mobility to the customer (Breuer and Upadrasta, 2017). However, Nano had several fire incidents which the company claimed it resulted from foreign electrical equipment installed on top of the exhaust system.
Promotion – Ineffective marketing strategy contributed to poor sales performance even after the revised version of Tata Nano (Singh and Shalender, 2014). The company failed to recall back fault cars even after realizing the defect, which affected the customer’s trust. According to Tata Motors press release in 2018, Nano failure was also contributed by the company’s failure to establish a strong dealership network within India. Although the management has mixed views, the company might abandon the Nano project or add it to its product portfolio since it has led to stagnation in sales for the entire collection. However, Tata Motors is planning to increase its existing and new product; and design an interactive and engaging digital interface that will provide visiting customers with an exciting experience. This will expand the company’s exiting market in India Pareek, (2018). Also, the company plans to back electric mobility, and have most of the products have an electronic solution in the future. These promotion measures are likely to revive Nano’s demand.
Placement – The launce of Tata Nano was not just an opportunity but a tool meant to improve the quality of Indian lives. Nano was meant to be sold to the millions of Indians who were low-income earners. The target group was well selected, but the conditions and prices were not as expected Kalla, (2015). According to (India Business news, 2020), Tata Motors has no plans of discontinuing the production of Nano model since it will not meet the safety of regulations, emission norms.
3.1.2 Strategies needed in the new product introduction process
The new project is a result of creating a unique idea that can satisfy consumer needs. Several models can be used to introduce a new product to the market, which generally takes 8 processes where all the steps are connected (Fig 1);- (1) opportunity identification and generating new product idea (2) screening and evaluating the idea (3) concept development and testing of product (4) developing marketing strategies (5) analyzing the business (6) improving the product, (7) testing the market and (8) commercialization (Claessens, 2015).
The management is required to decide at the end of each process ,the development process and determine if the process is to be continued to the next stage or not.