Important Branding Lesson from Ratan Tata
Ratan Tata, one of the most successful Indian businessmen of all time and former chairman Tata Group, has revealed an important branding lesson after admitting to mistakes being made in the marketing for the Nano car brand. Labeling the car as “cheap” was, in Tata’s eyes, a clear error as it led to a negative public perception of the car that resulted in disappointing sales. The Chairman Emeritus of Tata Sons has made a bold move in admitting his mistakes, but this knowledge will prove valuable to businessmen all around the world who seek to follow in the footsteps of one of India’s business icons.
Tata made the claims at a recent talk he was giving at the Great Lakes Institute of Management. The students in attendance were evidently intrigued as he described the mistake of labeling the car as “cheap” rather than “affordable”. Naturally, Tata explained, the idea of an affordable car is more attractive than a cheap one. The latter evokes associations with low quality and poor production values, while the former suggest a connection with families and individuals on restricted budgets.
Tata explained how the Nano was intended to “reach out to people” and that the marketing behind the car was meant to support this idea. The businessman suggested that the “cheap” labeling was meant to entice people with lower incomes into feeling that the company was thinking of them. However, the branding unfortunately become associated with more negative images that resulted in people shying away from Nano cars in general. Nevertheless, Tata maintains that the Nano launch was particularly successful and that the brand of cars is still doing well in spite of this mistake.
This success did come at a cost however, as Tata explained that the production factory for the Nano cars had to be relocated after waves of criticism were directed at the company by various detractors. Tata questions the fairness of this criticism but accepted it nonetheless. It took an extra year for the Nano launch to arrive after the factory was forced to shift states. Still, when the launch finally came, the Nano brand proved to be popular with many people and the cars should have a bright future ahead of them.
During the talk, Tata also praised the current state of Indian education, comparing it to the exciting times in the sixties and seventies in America. Since leaving his post as chairman of that Tata Group in 2012, Tata has invested in a wide variety of startups and sees plenty of potential for the future. Evidently, the businessmen and women he supports will be keen to avoid emulating the mistakes made with the Nano car brand. The branding lesson he learned the hard way will clearly provide vital knowledge for future successes all around the world of business. Marketing graduates and enthusiasts will all be able to learn something from this story and will hope to avoid a similar situation in their own professional careers.