B2B Tyre Industry Final

50
MARKETING

Transcript of B2B Tyre Industry Final

Page 1: B2B Tyre Industry Final

MARKETING

Page 2: B2B Tyre Industry Final

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”

Page 3: B2B Tyre Industry Final

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

Page 4: B2B Tyre Industry Final

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

Page 5: B2B Tyre Industry Final

B2B Distribution Channel

Manufacturer

Company Sales Force

Representative Agency

Distribution Dealer

Customer CustomerCustomer

Page 6: B2B Tyre Industry Final

Top B2B Brands

Page 7: B2B Tyre Industry Final

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%

Page 8: B2B Tyre Industry Final

PESTLE

Page 9: B2B Tyre Industry Final

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

Page 10: B2B Tyre Industry Final

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.

Page 11: B2B Tyre Industry Final

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.

Page 12: B2B Tyre Industry Final

TECHNOLOGICAL

Radialisation of tyres is likely to result in lower replacement demand.

Tyre retreading New Methods like Cold Retreading

Page 13: B2B Tyre Industry Final

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.

Page 14: B2B Tyre Industry Final

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.

Page 15: B2B Tyre Industry Final

SWOT

Page 16: B2B Tyre Industry Final

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

Page 17: B2B Tyre Industry Final

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.

Page 18: B2B Tyre Industry Final

OPPORTUNITY

• Strong Growth

• Infrastructure Development especially roads

• Shift to redialization can increase profitability in future

• Global sources for raw material.

Page 19: B2B Tyre Industry Final

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

Page 20: B2B Tyre Industry Final

STPD

Page 21: B2B Tyre Industry Final

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

Page 22: B2B Tyre Industry Final

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

Page 23: B2B Tyre Industry Final

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

Page 24: B2B Tyre Industry Final

Positioning

• Punch line: Tyres with Muscle• Superior Endurance, Strength, Sporty & Home-Grown• Sponsors Cricket & Rally racing to position as high

endurance and sporty

Page 25: B2B Tyre Industry Final

• High Performance, Top Quality & International standard.• Punch line: Passion for Excellence.• This communication is substantiated by association to F1

racing

Page 26: B2B Tyre Industry Final

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.

Page 27: B2B Tyre Industry Final

4P’s

Page 28: B2B Tyre Industry Final
Page 29: B2B Tyre Industry Final

Product

Page 30: B2B Tyre Industry Final

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

Page 31: B2B Tyre Industry Final

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

Page 32: B2B Tyre Industry Final

Product Mix Dimensions

Page 33: B2B Tyre Industry Final

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)

Page 34: B2B Tyre Industry Final

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)

Page 35: B2B Tyre Industry Final

Product Mix=304

Passenger Cars

Two Wheelers

Truck-Buses Farm Services

LCV

Big Rover (2)

Estate(1)

Swgg(4)

SM-12(4)

Legend(3)

Page 36: B2B Tyre Industry Final

Place

First Identify the Customer Base

• Replacement

• OEM

• Exports

Page 37: B2B Tyre Industry Final

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

Page 38: B2B Tyre Industry Final

Indirect Channel

One or more intermediaries between tyre manufacturer and final consumer

Page 39: B2B Tyre Industry Final

Channel Length

No of intermediaries between Manufacturer and end user

Channel Management

• Selection of Dealer

• Training and motivating Channel Members

• Effective Consumer Response Practice

Page 40: B2B Tyre Industry Final

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

Page 41: B2B Tyre Industry Final

Promotion

• Huge Investment in Print , TV and outdoor Media by MRF• Slogan “Tyres with Muscles”• Celebrity Endorsement

Page 42: B2B Tyre Industry Final

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

Page 43: B2B Tyre Industry Final

PRODUCT LIFE CYCLE—PLC

Page 44: B2B Tyre Industry Final

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.

Page 45: B2B Tyre Industry Final

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.

Page 46: B2B Tyre Industry Final

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

Page 47: B2B Tyre Industry Final

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.

Page 48: B2B Tyre Industry Final

Product Life Cycle For Tyre Industry

Page 49: B2B Tyre Industry Final

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

Page 50: B2B Tyre Industry Final

TV commercial