Launching a New Product? You'll Struggle If You Don't Keep These 4 Positioning Lessons in Mind.

In 2009, Tata Motors, 1 of India's starring automobile companies, launched Nano, a car priced astatine astir $2500 (or INR 100,000), astir half nan costs of its nearest rival. It was known arsenic nan "world's cheapest car." The company's website collapsed because it received complete 40 million hits successful a short span, which it was not capable to header with.

Buying a car successful India was a luxury backmost then. For context, nan number of cars successful India per capita was importantly less than successful nan United States — astir 20 successful India vs. 800 successful nan U.S. per 1000 inhabitants. While nan Indian rider car marketplace saw 1.4 million units being sold successful 2008, nan past lowest-priced car, nan Maruti Alto sold 230,000 units, almost 15% of nan full market. As a highly cost-sensitive population, Indians flocked to motorbikes, pinch 8 million units sold successful 2008. Thus, cars astatine nan lowest extremity of nan value scope competed pinch motorbikes and not needfully pinch conscionable different cars.

The motorboat of nan Nano was driven by Ratan Tata, Chairman of nan Tata Group, who promised a car priced astatine INR 100,000 (or INR 1 Lakh). Tata zeroed successful connected this value point, arsenic it is simply a symbolic benchmark successful India, and past connected his engineers to build a car that could beryllium sold for this price. He believed that nan Nano would democratize car ownership and make nan dream of owning a car affordable to a full caller stratum of society, particularly those who would person different bought motorbikes.

It was estimated that Tata Nano could grow nan Indian car marketplace by 65%. But nan Nano underwhelmed — nan maximum income ever achieved was 75,000 units successful 2012, pinch income declining quickly thereafter. In fact, successful February 2019, conscionable one Tata Nano was sold successful nan full country, and nan Tatas stopped accumulation of nan car successful 2020 altogether.

This was a costly misadventure for nan Tata Group that holds a batch of valuable lessons for marketers.

So, what positioning lessons tin we study from nan Nano?

Related: Why Positioning Is More Important Than Ever

1. Do not place your customers' affectional motivations

When you are positioning your product, you request to really understand your user and their emotional needs. For Indians, car ownership was a matter of pride, not conscionable utility, and buying a car was a motion that 1 had arrived successful society. This is captious to understand. The erstwhile cheapest car successful nan market, nan Maruti Alto, was a very successful automobile and bought by hundreds of thousands of Indians, but it was ne'er advertised arsenic nan cheapest car successful nan market.

No 1 who wants to awesome to nine that they are doing good successful life would want to beryllium associated pinch nan "world's cheapest car." But, wittingly aliases unwittingly, that is unluckily really nan Nano was positioned, and it turned retired to beryllium a colossal mistake. As a marketer, you request to afloat understand your customer's motivations arsenic that's cardinal to positioning.

2. Remember that value often implies quality

The Indian consumer's preferences had evolved complete time: Quality was besides a captious constituent successful car acquisition decisions, not conscionable nan price. They besides associated debased value pinch debased quality. In this instance, nan extraordinarily debased value of nan Nano was a awesome astir its quality, and consumers interpreted nan 1 Lakh value tag to mean that nan Nano was a poorly built car. Reports of nan Nano catching occurrence did thing to thief that perception. In applicable terms, nan car provided only 36 horsepower and a apical velocity of 65 mph.

While it was missing galore of nan things that 1 would usually expect moreover successful nan cheapest automobiles successful nan Western countries, specified arsenic aerial conditioning, nan value constituent threw into mobility whether nan car's build was compromised and whether nan car was immoderate safer than, say, a motorbike. So, beryllium cognizant of what your value point mightiness unintentionally convey to your customer.

Related: How to Define Your Product and Set Your Prices

3. Don't effort to beryllium everything for everybody

When launching immoderate product, it is captious to intelligibly define and understand nan target assemblage — this brings an important attraction to your positioning approach. A well-defined marketplace allows a marketer to tailor messaging to resonate amended pinch nan target user segment. In nan Nano's case, it was ne'er clear who nan Nano was for. Was it to switch nan motorbike for commuting? Was it an aspirational first car for a young driver? Or was it a 2nd car for an able family? By trying to cater to everyone, nan Nano grounded to link powerfully pinch immoderate circumstantial conception of customers.

4. Respect your marketers' research

Even erstwhile nan apical executive of a institution drives a merchandise launch, it mightiness still beryllium worthwhile listening to your trading head who will beryllium person to user sentiment, marketplace investigation and branding pitfalls. Visionary activity needs to beryllium balanced pinch grounded trading strategies that harvester consumer psychology and positioning.

When Ratan Tata chose nan value constituent and drove nan merchandise creation astir nan price, he unwittingly took distant immoderate of nan astir important levers that Tata's marketers had. The trading managers astatine Tata Motors couldn't power positioning astatine all. The truth that Tata announced each of this publicly, good earlier launch, meant that nan marketers controlled thing astir messaging and really nan merchandise would beryllium perceived. So, arsenic a business leader, respect your marketers' opinions.

Related: 5 Steps to Position Your Brand for Maximum Success

In conclusion, nan nonaccomplishment of nan Tata Nano offers important insights for marketers and highlights nan value of knowing your customers' affectional motivations, perceptions of value and quality, intelligibly defining your target assemblage and respecting your marketers' research. By keeping these positioning lessons successful mind, you tin guarantee your adjacent merchandise motorboat is simply a success.