The Dream Car That Failed To Scale | Case Study - Learning IRL By ABGLP

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Introduction- The Protagonist

Ten years after it was launched, this car manufactured by a legacy Indian company is dead, waiting to be formally buried. Let’s call it the car.

In June 2018, only one car was produced. When it was launched in 2008 it won a plethora of international awards based on its defining features – high fuel efficiency, low weight, designed to incorporate all international safety regulations then applicable and having the lowest emission level among all cars then being made in India – offered at the cheapest price in the world.

For most, the car would have been their very first, while for others it was a dream come true. Yet, even though the idea was sound, the vehicle failed to capitalize on the market potential and production has all but ended after sales of the company dropped to extremely low levels.

What went wrong and what lessons can be learnt?

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Marketing The Car

The hatchback sounded good on paper, but a number of issues plagued the car before production even started. That is where things really went wrong, bringing about the car’s failure. Reasons were aplenty but here are some of the major ones.

Practical Design

People expect mobility from a small vehicle like a motorbike or car. But this was not possible with the car.

While it was small, it simply was not small and convenient enough for people who were used to motorbikes. That was a major issue in the car’s marketability that the automaker had not even considered.

Also, the car was more expensive to maintain than a bike and made car ownership more expensive. The lack of standard features that are usually expected in such vehicles also made it feel cheaper.

Both these differences compared to bikes could have been overcome with a better and safer design as well as a more refined look and feel. It simply wasn’t what people wanted to buy. Car sales in this segment were extremely sensitive to how good a vehicle looks.

Positioning

The automaker was under the misconception that the low price would be enough to motivate people to buy the car. They did not account for their positioning it as a cheap vehicle which, in India’s markets, translates to low quality. After all, who wants a daily driver that looks cheap and is poorly built?

Simply put, those who could afford a higher end Nano did not want to drive it. Also, when people are status conscious, they look for things that make them look wealthier than their neighbors and colleagues. While a car sounds like it would be an upgrade from bikes, a cheap one that looks the part will always be shunned and will never be perceived as a means to boost one’s social status.

An older, used sedan or hatchback that was more expensive when it was first launched would have more value for such a market than a new one that was marketed as cheap.

Emotionally Disconnected Advertising

One of the most challenging aspects of marketing a vehicle like the car is advertising. A basic rule of advertising is to create an emotional connection or a bond with the audience that makes them want to experience the product. The company failed to do so with their advertisements for the car.

While some TV commercials were fairly good, most of their audiences simply could not relate to what they were seeing on the screen. If the off positioning was not enough, the fact that people also could not relate to the advertisements made things a lot worse.

In a country where emotions play such a vital role in everything, this disconnect spelled doom for the car before it even hit the roads. After all, why buy an automobile if the car owner can’t relate to it?

Non-Existent Public Relations

The automaker’s bad public relations after a few cars burned down due to poor build quality did not improve matters. The company simply ignored this crucial aspect and, while everyone focused on how many units caught fire, no one talked about how many were running on the roads just fine. That also convinced the general public that the car was so cheap because the company cut corners in the manufacturing process.

While this would not have been a major issue on its own, when combined with bad marketing and advertising, it became one of the biggest reasons for first-time car buyers to avoid the car.

The Demise of a Dream

The car’s failure is a key learning point on how not to market and position an automobile. Bad marketing and public relations for a hatchback that was not well designed and manufactured from the start simply added fuel to the fire. Why car failed serves as a case study for future endeavours.

From a novel but faulty idea to a possibly promising reality that never transpired, the automaker simply could not deliver what it had promised and instead gave the people what they did not want: A cheap car that looked and felt cheap and was unsafe to drive.

The very first assumption that people wanted a cheap vehicle resulted in a cascading effect that ended with the demise of the car.

It was simply a car that was too expensive for the target market, yet too cheap for those who could afford it.

Analyse the case from the situation above and share your answers on how you would handle the case differently here:

Problem Statements

• As the CMO handling the project for the car, what changes would you make to the product positioning in order to succeed in the market?
• What market research would you conduct before launching the product?
• How would you deal with negative backlash in the news, about the car being of a bad design quality?
• How would you design a digital campaign to create a positive brand image for the car?
• Finally, how would you make sure that design and production improve through marketing feedback?

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