Resources

Strategic Direction / 2009. Selling to the bottom of the pyramid: The case of Tata Nano.
Strategic Direction, 25 (6): 10-12.

Since the term ‘‘bottom of the pyramid’’ was coined, the poor living in low- and middle-income countries have received increasing attention. The bottom of the pyramid attracts multinational companies because of its large population with spending demand, low consumer expectations and slight competition. At the beginning of 2008 Tata Motors unveiled the Tata Nano, a small car made for India’s poorer population. Four years earlier Tata had come up with a new concept of developing a car for people who previously could not afford one. A price tag of 100,000 rupees (about US$2,350 or £1,500) became the goal and by 2008 the reality. Even though the Nano is not affordable by the poorest, it does, however, serve the needs of those within the bottom of the pyramid who so far could afford a motorcycle but not a car. Indian households spend some 2.5 percent of their expenditure on transportation; about 71 percent of all transportation expenditure comes from the bottom of the pyramid.


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Region: South Asia