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New Market Creation via Innovation: A Study on Tata Nano
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Objective of the paper - This research paper focuses on how innovations support new market creation emerging from latent opportunities for low-income group. It also emphasizes on novel strategies that can be implemented for sustaining. The paper concludes with a discussion on the implications of the study and directions to stimulate future research on the subject.
Design/methodology/approach - A hybrid methodology comprising of a case study on the 2200 USD (equivalent to INR 1,00,000) car Tata Nano and supported with a quantitative survey on a random sample of prospective Nano customers has been deployed. The qualitative case study helps to understand the macro picture on how innovation helped create new market for the masses. The quantitative survey measures the impact of various attributes of Nano on customer’s intent to purchase. These attributes have been identified through interviews of prospective Nano customers. Factor analysis has been deployed to establish corporate brand equity, aesthetics, and value for money & reliability as main attributes of Nano. Regression analysis is used to find out the influence of these attributes on intent to purchase Nano.
Findings - The study highlights the power of brand equity in new market creation and n innovation sustainability. The survey indicates the perception of prospective customers about Nano and how it impacts their buying decisions. The case reflects on how companies can successfully create products and at the same time positions it for its market adoption. The paper concludes with the development of new strategies to sustain this innovation.
Originality/value - The study’s originality springs from the diffusion of innovations theories and emphasising the need for organizations targeting the bottom of the pyramid. The case study reflects how a dream became a reality to own an affordable four-wheeler by masses.
Implications - A key implication of this paper is that the organizations must adapt ‘blue ocean strategy’ (Kim & Mauborgne, 2005) whereby organizations can generate high growths and profits by creating new demand in an uncontested market space. It also provides insights into understanding market behaviour towards innovation and adaption of low cost products.
Directions for future research - Similar studies can be carried out that can help in comparative analysis of different products targeted at the bottom of the pyramid. There is a possibility that selling to the bottom of the pyramid could be attractive in some industries or firms but not others. It would provide better understanding of what features help in sustainability of such products in the long run. It would also be interesting to find out how such products would be helpful in reverse innovation.
Research limitations - This case focuses on an automobile, which is a high involvement product. The implications and strategies could differ for products in other categories. The sample size for the study is not very large so it only gives an indication and not generalization of the findings. The case study on Nano focuses on the marketing and strategy perspective rather than production and technology.
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The authors provide an integrative processing model of Internet advertising, which incorporates the functional and structural schools of thought. The model begins with the functional perspective, which attempts to identify reasons for Internet use. Since most individuals enter cyberspace with some goal, or agenda, in mind, the authors argue that a model of online processing should begin with consideration of Internet functions. These functions, according to the authors, operate conjointly with the user’s mode--ranging from highly goal-directed to playful--to influence the types of ads web users will attend to and process. A number of mediating variables, such as skill level, are offered as reasons to switch motives. These variables are conceptualized as having either a deleterious effect, as in the case of low skill and high anxiety, or beneficial effect, as in the case of high skill and low anxiety, on ad processing. Last, the authors incorporate a structural perspective, which seeks to identify and classify Internet ads. The authors offer a broad scheme in which to classify most Internet ads, as well as a number of common features unique to these ads. The authors conclude by offering a number of hypotheses suggested by the model.
Tata Nano has rewritten the evolution of transport by creating history as the world’s cheapest car. The creation of Tata Nano is a result of innovation leading to new market creation to tap latent opportunities lying at the bottom of the pyramid in the automobile, four-wheeler segment. This is the turnaround story of Tata Nano which focuses on how the initial strategies for launching and positioning backfired, leading to attraction of the wrong segment towards the car. There were instances that made people lose their interest and trust in Nano resulting into its nose-diving sales. The case highlights how Tata Motors Ltd. recognized its shortcomings and mistakes that led to the rejection of Nano among the segment it was created for. It revamped its strategies keeping in mind only its targeted segment that is the bottom of the pyramid. Thereafter it bounced back to win the trust of its prospective customers and is presently on a path-breaking journey to win sales.
To investigate the impact of the 2008 global economic crisis on international trends in suicide and to identify sex/age groups and countries most affected.
Time trend analysis comparing the actual number of suicides in 2009 with the number that would be expected based on trends before the crisis (2000-07).
Suicide data from 54 countries; for 53 data were available in the World Health Organization mortality database and for one (the United States) data came the CDC online database.
People aged 15 or above.
Suicide rate and number of excess suicides in 2009.
There were an estimated 4884 (95% confidence interval 3907 to 5860) excess suicides in 2009 compared with the number expected based on previous trends (2000-07). The increases in suicide mainly occurred in men in the 27 European and 18 American countries; the suicide rates were 4.2% (3.4% to 5.1%) and 6.4% (5.4% to 7.5%) higher, respectively, in 2009 than expected if earlier trends had continued. For women, there was no change in European countries and the increase in the Americas was smaller than in men (2.3%). Rises in European men were highest in those aged 15-24 (11.7%), while in American countries men aged 45-64 showed the largest increase (5.2%). Rises in national suicide rates in men seemed to be associated with the magnitude of increases in unemployment, particularly in countries with low levels of unemployment before the crisis (Spearman's rs=0.48).
After the 2008 economic crisis, rates of suicide increased in the European and American countries studied, particularly in men and in countries with higher levels of job loss.
This chapter will give concrete form to the previous one. There we discussed the mind-body problem against the background’ of “pure” science and philosophy. Here we will do the same in the context of medicine.
The authors integrate theory developed in several disciplines to determine five cognitive processes through which industrial buyers can develop trust of a supplier firm and its salesperson. These processes provide a theoretical framework used to identify antecedents of trust. The authors also examine the impact of supplier firm and salesperson trust on a buying firm's current supplier choice and future purchase intentions. The theoretical model is tested on data collected from more than 200 purchasing managers. The authors find that several variables influence the development of supplier firm and salesperson trust. Trust of the supplier firm and trust of the salesperson (operating indirectly through supplier firm trust) influence a buyer's anticipated future interaction with the supplier. However, after controlling for previous experience and supplier performance, neither trust of the selling firm nor its salesperson influence the current supplier selection decision.
In today's business environment, there is no executive task more vital and demanding than the sustained management of innovation and change. Rapid changes in the marketplace make it essential to think in terms of the future. This article discusses the various types of innovation and focuses on how to organize for today's work while managing for tomorrow's innovation. It also deals with the role of leadership—specifically, the relationship between executive leadership and innovation.
It's high time for multi-national organizations to implement reverse innovation model with their existing glocalization model. common problem of developing a product in a developed western market or an emerging market. Today, multi-national organizations are striving to hold their spot in the global competitive market. Developed western markets are stagnant and there is less scope of creation and adoption of innovations in these markets. This paper discusses how multi-national organizations are dealing with the tight spot of leveraging the reverse innovation model with their existing glocalization model to increase the realm of their market.
MUMBAI --Indian companies, long dependent on hand-me-down technology from developed nations, are becoming cutting-edge innovators as they target one of the world's last untapped markets: the poor. India's many engineers, whose best-known role is to help Western companies expand or cut costs, are now turning their attention to the purchasing potential of the nation's own 1.1-billion population. The trend that surfaced when Tata Motors' tiny $2,200 car, the Nano, hit Indian roads in July, has resulted in a slew of new products for people with little money who aspire to a taste of a better life. Many products aren't just cheaper versions of well-established models available in the West but have taken design and manufacturing assumptions honed in the developed world and turned them on their heads. For the farmer who wants to save for the future, one Indian entrepreneur has developed what is, in effect, a $200 portable bank branch. For the village housewife, a wood-burning stove has been reinvented to make more heat and less smoke for $23. For the slum family struggling to get clean water, there is a $43 water-purification system. For the villager who wants to give his child a cold glass of milk, there is a tiny $70 refrigerator that can run on batteries. And for rural health clinics, whose patients can't spend more than $5 on a visit, there are heart monitors and baby warmers redesigned to cost 10% of what they do elsewhere. Such inventions represent a fundamental shift in the global order of innovation. Until recently, the West served rich consumers and then let its products and technology filter down to poorer countries. Now, with the developed world mired in a slump and the developing world still growing quickly, companies are focusing on how to innovate, and profit, by going straight to the bottom rung of the economic ladder. They are taking advantage of cheap research and development and low-cost manufacturing to innovate for a market that's grown large enough and sophisticated enough to make it worthwhile. "There was a large potential market that all the players have not been able to reach," says G. Sunderraman, a vice president at Mumbai's Godrej & Boyce Manufacturing Co., which developed the inexpensive refrigerator dubbed the "Little Cool." "Now economic factors are making these areas more and more attractive." Unexpectedly strong demand for cheap cellphones in recent years revealed the untapped markets in India's villages and slums. Thanks to $20 cellphones and two-cent-a-minute call rates, Indian cellphone companies are signing up more than five million new subscribers a month, most of them consumers no one would have considered serving only five years ago. At the same time, many of the nation's poor have become aware of material goods available in developed economies thanks to a proliferation of television networks, radio stations, newspapers and magazines.