SWOT ANALYSIS OF TANKER TRUCK SEGMENT IN MUMBAI AND SUGGESTING MARKETING STRATEGYFORMAHINDRA TRUCKS AND BUSES DIVISION

OBJECTIVE Mahindra trucks and buses division (mtbd) is a new entrant in the tanker truck segment of the heavy vehicle operations. Earlier this company was known as mahindra navistar, which was a joint venture formed in 2005, between navistar international (49%) of the united states and indian automobile maker mahindra & mahindra (51%). In 2013 this jv was called off and mahindra purchased navistars stake to form mahindra trucks and buses division as a separate organization under mahindra and mahindra ltd. Untill now the sales operations of mahindra trucks and buses division were restricted to normal load haulage trucks. But now mtbd has expanded its operations in the fluid haualge segment (tanker trucks) with a full range of heavy vehicles. The market is completely dominated by tata trucks and ashok leyland. Bharat benz has also emerged as a promising prospect in the past few months. In the wake of these challenges mtbd aspires to carry forward its legacy in the passenger vehicles segment into the heavy vehicles segment. Hence they want to know what are the key touchpoints where they can improve and provide a better prospect to customers. The customers of heavy vehicles are freight carrier companies, transport agencies and industries like chemicles, explosives, petroleum products, edible oil companies etc. They are very keen on the performance and return on investment factor for buying a heavy vehicle. This project is a segment analysis study which focusses on finding out what are the customer needs, the issues and problems cistomers face and mark out areas where mtbd can address their issues. The report also presents a swot analysis of the tanker truck segment and focusses on developing a marketing strategy for the offerings of mtbd and how these offerings can prove to be the most profitable business asset for the customers business. Another key aspect of this project is studying what the competiton is doing. Tata and ashok leyland are big and established names of the heavy vehicles manufacturing industry. Untill the start of 2015, tata never had a sales team on field to sell its trucks. The transporters also had unwaivering trust in these brands. But since the past 2-3 years the trucking business in mumbai and around has seen a slight shift in equllibirum as new players in the market actively started marketing their products,transporters, in lure of better profits and techonolgy, have started including these vehicles in their fleet on an experimental basis and seem to be quite satisfied by the performance. Mtbd feels this shift in the status quo can prove to be the foot in the door opportunity that can be the foundation stone for writing their success story.

RESEARCH METHODOLOGY It wasnt easy to go forward with one kind of research approach for this kind of market. Initial attempts to gather relevant information through questionnaires proved to be futile as customers didint respond well. Sometimes they were short on time and sometimes actually refused to fill in the questionnaire. Prima facie, i found the market to be very fratcured and highly competitive. Geographical dispersion of respondents also made it very cumbersome to collect information. Hence a comprehensive research schedule was devised for the same. Firstly we identified areas where the tanker truck operaters were located. After that we earmarked specific days of the week to visit specific areas. The sales team fixed up appointments with the customers in a particular area on particualr days. DAYSAREA

MONDAYCHEMBUR (AZIZBAUGH, SHANKAR DEVAL)

TUESDAYSEWRI (GHASLET BUNDER AREA)

WEDNESDAYWADALA TRUCK TERMINAL

THURSDAYVASHI (SECTOR 90C, APMC MARKET)

FRIDAYCHEMBUR (GAWANPADA)

SATURDAYFIELD RESEARCH ON COMPETITORS / MEETING WITH MENTORS VASHI OFFICE

NO. OF TRANSPORTERS INTERVIEWED103

NO. OF BANKS & FINANCIAL INSTITUTIONS INTERVIEWED4

COMPETITORS INTERVIEWED3

The information was collected by a series of interviews over a 50 day period. It wasnt possible to capture the entire information in one meeting, hence i had to meet every transporter available multiple times. Apart from this a detailed study of competitors in the market was done. CONCLUSIONSThe Indian truck industry is at the point from where it can see whats in the future. Mahindra needs to find its place in that picture. With giants like Tata motors and Ashok Leyland polarizing the market in their favour, its not going to be an easy task. Strict decisions need to be taken and I think Mahindra has already realized the importance of this time. Their decision to absolve the joint venture came at a point where foreign players lie Daimler and Volvo were setting shop in India. The strategy of self-reliance and innovation will start paying dividends in some time. The customers also are speaking well of Mahindra as a brand but want to wait and watch its performance before committing fully to it. So till then Mahindra needs to work on these small areas which will eventually prove to be its stepping stones to success.

SUGGESTIONSANAND AGARWAL PGDM-RM (2014-16) STRENGTHEN PRICING CAPABILITIES The pricing competency is a major issue that needs to be addressed. The customers are very cost-centric in terms of initial investment and total cost of ownership. The operating costs for transporters are rising day by and day and the competitors give huge discounts to lure the customers. In the wake of these scenarios and being a new player in the tanker truck segment Mahindra cannot afford to have its trucks priced at a premium that its competitors.

ALIGNING THE PRODUCT STRATEGY The product strategy of Mahindra after the absolution of the joint venture with Navistar international has been very clear. They want to promote their brand through a home grown, familiar brand of product which has all the world class features and has the Mahindra promise. But somehow this strategy hasnt worked for them as well as it has worked for players like Tata motors. So clearly the market now demands something extra apart from just the product.

UTILIZE DELAER AND CUSTOMER INCENTIVES The Indian automobile market is witnessing a surge in competition and intense demand cyclicity with huge pressure on margins. The impact of this is particularly severe on the dealerships, who are even passing on discounts to the customers at the cost of the dealer margins in an effort to retain market share. And despite volumes rising in specific segments, the disproportionately high efforts in selling/ servicing is seeing dealer profitability being severely eroded. And to make matters worse, the lack of career or compensation growth in dealerships is driving away good talent who could have offset the industry challenges. Dealers are at a critical inflexion point today and need heightened strategic interventions. Dealers need to drive strategic direction setting and explore diversification opportunities. At the same time, they need to work closely with the OEM to chart out their segment specific growth requirements, skill set enhancement plans and operational improvements. This will require significant time and effort from the dealers. As dealers are critical customer touch points, the OEMs will also need to support them with time and re-sources in this initiative. Commitment and maturity shown by the dealers will be critical in order to derive sustained benefits over an extended period of time, help them break the growth ceiling and maintain their viability in an increasingly competitive market.

IMPROVE DEALER MARKET SHARE Dealerships will need to adopt a holistic approach that aligns their strategic plans, organization structure and processes, people capabilities and business processes to drive and enable growth.