Tata Nano seems to have made a habit of creating interesting news since last few years. The notorious Singur event in , the fire controversies, manufacturing & delivery issues and other factors had a lot to do with the slow progress of the Nano in terms of sales. But Tata Motors also felt that the ‘distribution aspect’ of the car was overlooked as well. And then goes a fresh headline on most media channels:
“Kishore Biyani's discounted retail format Big Bazaar, which started the concept of 'Sabse Sasta Din' a few years ago, is now selling the sabse sasta car - The Tata Nano.”
Sales of the Tata Nano have been on the rise. Last month, it is reported that Tata Motors sold about 8263 Tata Nanos. The Tata Nano featured in the 10 top selling cars in India last month after a big gap of 5 months. This is been heralded as a true sign of things to change for the small car. Tata Motors in a measure of assurance have also given the car a 4 year long warranty for the old and new customers of this car. Customers booking the Tata Nano from a Big Bazaar outlet would also get vouchers worth Rs 1500 or other gifts such as gold coins.
The move is definitely unconventional, but will it work over long term remains a question. The strategists of the two esteemed groups say that there is a lot of commonality between Big Bazaar consumers and prospective Nano buyers. Big Bazaar as a concept appeals to the masses and with over 150 million footfalls every year, they are trying to see how they can sell Nano, which has a similar positioning. So as far as positioning of Nano is concerned, the tie up makes a perfect sense. This is solely because of the customer mindset, who are entering Big Bazaar because they are seeking cheaper deals and more perceived value for less money. Imagine the plethora of people that walk into a Big Bazaar every day. Not only these people come from a varied stratum of the society, but they also spend a lot of time doing their daily groceries. Clearly, they would love spare a few moments to have a detailed look at the Nano.
Factually speaking, Big Bazaar generates close to 150 Million footfalls across the 133 Big Bazaar stores in India. A product like a car, which involves extensive decision making surely gets the eyeballs rolling, once it is displayed casually like any other merchandize in these discount stores. In fact, it gives an opportunity to a larger audience (social status wise), to experience the product. The ‘look and see’ and ‘touch and feel’ techniques of selling are emphasized here. A conservative laborer (per se) might not feel as shy entering Big Bazaar and having a look at what is supposedly his far distant dream – to owe a car! Though I don’t deny the fact that the target market still includes predominantly the lower-middle class and above, I refuse to accept that the laborer who wished to see the Nano placed in the discount centre is not your target market. Through channeling an automobile product like Nano through shopping centers like Big Bazaar, all Tata`s are doing is taking care of his anxiety which prevents this laborer to see his dream from a much lesser distance.
Both Tata, and the Future Group, Big Bazaar’s parent company, say they are encouraged by the results, citing the “synergy” and “convergence” between Big Bazaar’s price-sensitive clientele, and the target customers for the Nano. It is quite evident for why picking a discount store could turn into a trigger of fortune for Tata. But what are the benefits that Big Bazaar derives out of this move, that it readily accepted such an offer?
Surely there are commission based monetary rewards per unit sales, but these are tangible rewards. This is a great opportunity for Big Bazaar to showcase itself as a bench mark hyper market in India, which sells anything and everything! Anyway the positioning strategy of Big Bazaar matches with Nano. This will ensure consistency in targeting the prospective market.
Despite the speculated success of such a talked about step taken by them, there are certain issues which might thwart this progress. The first question is if India is ready to buy a car ‘off the shelf’. The things that one buys in a supermarket are commodities those which we use on a daily basis. No one does any research on those commodities before buying them. You don’t ask your friends, read magazines or browse on the internet for advice when you buy a commodity. You see it, you look at the price, you look at the features, you look at the discounts and put it in your carry basket. That’s it.
Car is much more than a commodity. It is an aspirational good that one buys after due diligence. Even if you are well off, you will still think twice before buying a car. So although you would love to have a detailed look at the car at your local Big Bazaar, you would still go home and do your research before buying it.
Finally, a distribution channel like shopping centers for selling automobiles can be a tricky gamble. Who would like to say that he picked his dream from a near buy shopping center? So the psychological factors that you deter the purchase decisions could not be avoided as well.
Overall, it was a unique, but pretty intelligent strategy to align your product with a distribution channel that offers a similar positioning. In the last month, around 450 Nanos have been sold through some of India’s 133 Big Bazaar stores – accounting for about 5 percent of the total Nano sales for the period, which is very encouraging for a faded brand like Nano. Intensified marketing efforts may help customers adapt to the idea of purchasing such a product involving extensive decision making from shopping centers like Big Bazaar. Focus must be reduction of the customer expectation gap, to ensure the customers about product delivering same kind of social rapport as well as performance, irrespective of the place it has been sourced from.
