b2b tyre industry final
Post on 13-Apr-2015
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MARKETING
Business to Business Marketing
Definition
“Business Marketing is the practice of individuals, or
organizations, including commercial businesses,
governments and institutions, facilitating the sale of their
products or services to other companies or organizations that
in turn resell them, use them as components in products or
services they offer, or use them to support their operations”
Industrial Vs Consumer Marketing
Areas of Difference Business Market Consumer Market
Market Characteristics Geographically Concentrated Geographically Disbursed
Relatively Fewer Buyer Mass Market
Product Characteristic Technical Complex Standardize
Customized
Service Characteristic Service , timely Availability extremely Important
Somewhat Important
Buying Behavior Involvement of Various functional area from both the ends
Involvement of family members
Purchase Decisions are performance based and rational
Purchase decisions are mostly based on Physiological /social/psychological needs
Technical Expertise Relatively less technical expertise is required
Industrial Vs Consumer Marketing
Areas of Difference Industrial Market Consumer Market
Channel Characteristic More Direct Indirect
Fewer Intermediaries Multiple layer of Intermediaries
Promotional Characteristic Emphasis on Personal Selling Emphasis on Mass Media (Advertising)
Price Characteristic Competitive Bidding and Negotiated Prices
List Price or MRP
List Price for Standard Products
B2B Distribution Channel
Manufacturer
Company Sales Force
Representative Agency
Distribution Dealer
Customer CustomerCustomer
Top B2B Brands
Tyre Industry Overview
• Indian Tyre industry Rs.40,000 crore• Trends in Tyre industry
- CAGR of 6.44 % between FY 2004-09 - Indian tyre industry grows 5.3% in 2011-12
• Major Players -MRF Ltd 22% -Apollo Tyres 21% -JK Tyre 18% -CEAT 13% -Birla Tyres 10%
PESTLE
POLITICAL
Anomaly of Customs Duty on raw-material i.e. Natural Rubber @ 20% being higher than that on finished product (Tyres @10%).
According to FICCI, it is imperative that customs duty of principal raw material of tyre industry i.e. Natural Rubber should be revisited
To overcome problem with respect to exports of tubes / flaps, it is suggested to include 'Tyre Manufacturer' as a class of Exporters under Rule 20 of Central Excise Rules to allow them procure tubes and flaps without payment of duty for exports.
Increase in prices of rubber and other key raw materials
ATMA has asked for waiver of customs duty on those raw materials
ECONOMIC
Hike in the tyre prices due to the devaluation in rupee A weaker rupee may provide some relief as it will help boost tyre exports. A drop in passenger car sales is forcing tyre makers to trim production or
step up export to keep the inventory in check Automobile companies have reported poor sales in the current quarter
and there is speculation that demand will remain flat in the coming months with a soaring fuel bill and a rise in interest rates.
The sovereign debt crisis in Europe and lower offtake by China have kept the global rubber prices depressed.
Prospects of Tyre Exports look healthy and favorable with all major plants situated close two ports (in Gujrat), thus lowering the logistics cost.
Strong future growth prospects for automobile points towards equally increased demand for complement products such as Tyres and with prevailing low interest rates, manufactures can augment the production capacity.
SOCIO-CULTURAL
Explosion in the number of nuclear families: Higher car density per family With strong growth, consumer sensitivity is decreasing towards cost or
price, thus leading to increased demand for (comfortable and comparatively expensive) Radial Tyres.
High % of replacement markets (63% in passenger car segment) leads towards greater dependence towards retail sales, thus company needs to strengthen the retail distribution channel.
Increasing Brand Consciousness among ballooning middle class consumers (yearly income between 60,000 and 2,15,000) calls for investments towards brand building and brand visibility.
At 26.3 years of Median age and increasing share of services sector in GDP coupled with Two wheeler tyres constituting a largest segment (38% share) of tyres demand demands increased concentration on youth and designing products to meet their needs.
TECHNOLOGICAL
Radialisation of tyres is likely to result in lower replacement demand.
Tyre retreading New Methods like Cold Retreading
ENVIRONMENTAL
Increased consumer consciousness towards environmental calls for ‘greener products’ and green tyres.
Demand shall increase for more efficient and long lasting tyres.
Use of Increased proportion of Non petroleum content in tyre shall increase.
LEGAL
Stringent standards being introduced for various categories of tyres.
Harsh measures and penalties introduced by Supreme Court of India on Overloading of Commercial Vehicles thus resulting in increased life for tyres.
SWOT
STRENGTHS
• More than 70% turn over is from top 4 Companies.
• Well established brand names and distribution network by Existing players.
• High Capital Expenditure creates barriers to new entrants.
• Tyre and tubes Import/Export Freely allowed
WEAKNESS
• Fortune depends on process of key raw material such as rubber
and crude oil, any Sharpe rise can impact profitability
significantly.
• Tyre industry industry is unable to pass on majority of price
hike to end consumer due to high competitive pressure.
OPPORTUNITY
• Strong Growth
• Infrastructure Development especially roads
• Shift to redialization can increase profitability in future
• Global sources for raw material.
THREATS
• Prices of raw material
• Prices of Diesel and Petrol are high.
• Imported tyres from china is a challenge for Indian manufacturers.
• Decrease in demand of automobile sector affects demand for tyre
STPD
Tyre Market Segmentation
Indian Tyre Industry
Commercial Vehicles
MHCV HCV LCV
Passenger Vehicles
Cars Motorcycles Scooters
Others
Farm OTR Industrial Vehicles
MHCV - Medium Heavy Commercial VehiclesHCV - Heavy Commercial VehicleLCV - Light Commercial VehicleOTR - Off the Road
Market Targeting
MRF : Compete Market Coverageo MRF holds a diversified portfolio of products spanning the entire
tyre market.
M1 (Cars)
M2 (Trucks)
M3 (2-wheelers)
P1 Touring Tyres Economy Tyres High Grip Tyres
P2 Sport Tyres Mileage Tyres Touring Tyres
P3 Economy Tyres Endurance Tyres Best Fit Tyres
Bridgestone – Market Specialization
• Bridgestone India has focused on the Passenger Car Segment exclusively as it offers only radial tyres.
M1 (Cars)
M2 (Trucks)
M3 (2-wheelers)
P1 Touring Tyres
P2 Sport Tyres
P3 Economy Tyres
Positioning
• Punch line: Tyres with Muscle• Superior Endurance, Strength, Sporty & Home-Grown• Sponsors Cricket & Rally racing to position as high
endurance and sporty
• High Performance, Top Quality & International standard.• Punch line: Passion for Excellence.• This communication is substantiated by association to F1
racing
Differentiation
• Being a homogeneous product, there is not much difference in products
offered by competing tyre manufacturer. However,companies do try to
differentiate themselves by outdoing one another insome
(POP): Points of Parity such as (POD):-Point Of Differentiation
Quality High Endurance Tyres
Safety High Performance Tyres
Durability
Grip
Economy etc.
4P’s
Product
Product
• Core Tyre a customer vehicle can run on• Basic Tyre that fits customer vehicle• Expected Quality, Safety, Durability, Mileage, Grip,
Concerning to breaking, Ride Comfort
Augmented Benefits
Bridgestone MRF
Value PropositionQuality, Comfort and Value
for Money
Value PropositionQuality and Endurance
Quality- International Standards
Comfort- Smooth and QuiteValue for Money
Quality- International Standards
Endurance- Durability on tough Indian roads
Product Mix Dimensions
Passenger Cars
Two Wheelers Trucks-Buses Farm Services
LCV SCV
ZVTV(7) Zapper FV(1) Super Miller99(4)
Shakti Super-(12)
Superlug 50 plus-R(1)
Steel Master(1)
ZLO(4) Zapper FM(1) Steel Muscle SIT4(2)
Shakti Life(12)
Superlug 505(2)
Steel MuscleR(1)
VTM(1) Zapper FS(3) Steel Muscle (3) Rib(7) Supermiler 99 (3)
Zigma(2)
SLM(2) Rib Plus(6) The Lug Plus(4) Trailer707(2) Supermiler 95 (1)
Savari Trek(1)
ZQT(8) Meteor(2) Muscle rokx(4) Power Tiller(1)
Superlug(1) Savari Lug(1)
ZTX(5) Zapper YM(1) Muscle rok(1) Fork Lift Solid(10)
Superlug-R(1)
Savari (1)
ZSLK(4) Zapper Y(8) M-77(5) Pneumatic(5)
Steel Master (1)
ZEL(3) Zapper Q(8) Superlug 50 plus R(1)
ZVRL(2) Zapper Vyde(3) Superlug 555(1)
Passenger Cars Two Wheelers Trucks-Buses Farm Service
LCV SCV
ZV2K(20) Zapper C(5) Superlug 50 plus (2)
ZVT(20) Moto-D(4) Superlug 50(3)ZCC(2) Moto-C(3)ZGT(2) Nylogrip - ST Plus(1)
ZGP(5) Nylogrip – Plus(7)
ZVTS(40) Nylogrip – Plus FE(1)
NDMS(10) Zapper D (1)
Safari(10) Nylogrip – Plus(2)
Twintread(2) Nylogrip – Scooter(2)
Product Mix=304
Passenger Cars
Two Wheelers
Truck-Buses Farm Services
LCV
Big Rover (2)
Estate(1)
Swgg(4)
SM-12(4)
Legend(3)
Place
First Identify the Customer Base
• Replacement
• OEM
• Exports
Distribution Channels (Direct and Indirect)
• Direct ChannelsOEM Direct Supply to Automobile Manufacturer - Bulk Quantity - Exclusive Channel - Cater Just In Time for OEM - Sometimes may use C & F agents
Indirect Channel
One or more intermediaries between tyre manufacturer and final consumer
Channel Length
No of intermediaries between Manufacturer and end user
Channel Management
• Selection of Dealer
• Training and motivating Channel Members
• Effective Consumer Response Practice
Pricing
• Highly Raw Material Intensive Industry• Mark Up pricing strategy is used - Tyre market not very Price sensitive - More concern about functionality• Bridgestone Uses Price- Quality inference• Dealer Discounts and allowances
- Less in MRF compared to Bridgestone
Promotion
• Huge Investment in Print , TV and outdoor Media by MRF• Slogan “Tyres with Muscles”• Celebrity Endorsement
The official blimp sponsor of IPL 2010 the MRF blimpat the Chinnaswamy Stadium in Bangalore.
The blimp is 19 metres long, 400 cubic metres of Helium, maximum height of 1000 feet
PRODUCT LIFE CYCLE—PLC
INTRODUCTION STAGE
• PRODUCT ACCEPTANCE IN B 2 B IS DIFFERENT THAN IN B 2 C MARKETS.
• THE ADOPTION RATES AND REACHING OF THE GROWTH STAGE VARY
• PRODUCT REQUIRES EXTENSIVE TESTING• WHEN POTENTIAL FOR RAPID ACCEPTANCE ,BE
PREPARED TO MEET VIGOROUS COMPETITION.• WITH SLOWLY ACCEPTED PRODUCTS,CONCENTRATE
ON PRODUCT DEVELOPMENT.
GROWTH STAGE
• EMPHASIS SHIFTS ON IMPROVING PRODUCT DESIGN,DISTRIBUTION, SERVICE ETC.
• PRODUCTION EXPERIENCE AND ECONOMIES OF SCALE HELP LOWERING COSTS.
• ENSURE ADEQUATE AVAILABILTY TO KEEP COMPETITION AT BAY.
• LOWER PRICES AS COSTS LOWER,KEEPS COMPETITION AWAY.
MATURITY STAGE
• KEEPING EXISTING USERS SATISFIED IS THE KEY.
• ENTER NEW MARKETS
• UNLESS THE BUYERS PERCEIVE SUBSTANTIAL BENEFITS IN PRODUCT MODIFICATIONS, INCREASE IN PROMOTION DOES NOT HELP.
• RESISTANCE TO CHANGE IS EVEN STRONGER
DECLINE STAGE
• CHANGES IN CUSTOMERS’ REQUIREMENTS, STATE OF ART,BETTER SUBSTITUTES
• MAY PHASE OUT PRODUCTS.
• MAY REDUCE MARKETING EXPENSES.
• ALWAYS EXAMINE THE PROS AND CONS OF PHASING OUT.
Product Life Cycle For Tyre Industry
NEW PRODUCT DEVELOPMENT FOR TYRE INDUSTRY
• Finding New Product Ideas• Preliminary analysis of new product ideas and
selection process• Research on Products & Markets• Research on Manufacturing process• Semi works operation in Production and
Marketing• Transition to full – scale production and marketing
TV commercial
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