b2b tyre industry
TRANSCRIPT
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
TYPES OF INDUSTRIAL CUSTOMERS
• COMMERCIAL ENTERPRISES• GOVERNMENT CUSTOMERS• INSTITUTIONAL CUSTOMERS• COOPERATIVE SOCIETIES
BUYPHASES IN THE INDUSTRIAL BUYING-DECISION PROCESS
1. Recognition of a problem
2. Determination of the appliccation & qty.
3. Development of specifications
4. Search for & qualifications of potential suppliers
5. Obtaining & analysing supplier proposals
6. Evaluation of proposals & selection of suppliers
7. Selection of an order routine
8. Performance feedback & post-purchase evaluation
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
THREATS
• Prices of raw material
• Prices of Diesel and Petrol are high.
• Imported tyres from china is a challenge for Indian manufacturers.
ENTRY BARRIERS-HIGH
• Large Capital Required
• High Raw material cost
• High risk
BARGAINING POWER OF SUPPLIER-HIGH
• Raw materials cost accounts for approx. 70% of Tyre Industry Turnover.
• 63% of total Natural Rubber consumption is by the Tyre Sector, balance by rubber based non-tyre industries.
• Number of supplier is less.
THREAT OF SUBSTITUTE-MEDIUM
• Imports from chinese market.
• Entry of international players.
BARGAINING POWER OF THE BUYER-HIGH
CEAT Apollo MRF
Tata Motors Tata Motors Tata Motors
Ashok Leyland FIAT Honda
M&M M&M M&M
Swaraj Mazda,, Maruti Suzuki Maruti Suzuki
Caterpillar Hyundai
Hero Honda Audi
INTER FIRM RIVALRY-HIGH
STPD
Tyre Market SegmentationIndian Tyre Industry
Commercial Vehicles
MHCV HCV LCV
Passenger Vehicles
Cars Motorcycles
Scooters
Others
Farm OTRIndust
rial Vehicl
es
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
• High Performance, Top Quality & International standard.• Punch line: Passion for Excellence.• This communication is substantiated by association to F1
racing
Positioning
• Superior Endurance, Strength, Sporty & Home-Grown• Punch line: Tyres with Muscle• Sponsors Cricket & Rally racing to position as high
endurance and sporty
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 (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
TATA STEEL
• Amoung top 10 global steel companies• Annual steel capacity over 28 mtpa• Oprations in 26 countries and commertial presence in
more than 50 countries• Turnover of 26.13 billion US $ in FY 2011 12
Customer Value Management CVM
• Shortlisting of customers• Set up cross functional team• Joint team formation• Study the entire value chain of oprations
Customer Value Management CVM
• Key performance indices• Brainstorming• Shortlisting of ideas
Hygiene ideas Oprational improvement ideas Joint study ideas
• Further evaluation
CVM Benefits
• Saving cost across value chain of oprations• Deep insight and appreciation of customer’s problems• Changed focus• Strong bonding with customers
Industry Analysis
• Industry: Internet services and technologies
• Major Sectors: – Advertising– Search engine– Cloud computing
• Primary Revenue Source: Advertising (97%)
• Constantly evolving Industry
Google Product Offerings
Most popular Google sites
Marketing Strategy
• USP: Google facilitate the efficient organisation, storage and retrieval of data/information across a wide (online) platform. The result is a convenient, customizable, co-creation approach to media sharing for the use of individuals and organisations alike.
• Profit formula: Mostly dependent on advertising (97%), other main areas is software licencing to businesses
Positioning Analysis
• The Google company is positioned as:– Solution-centric– Innovative– Socially responsible– Vast networks, deep knowledge
• Google Advertising network– Advertiser-friendly– Traceable metrics – Google Analytics– Credible, tasteful advertising– Rewarding for all parties (advertiser, host & viewer)
Segmentation & Targeting
• The Google company:– Offers products that generally appeal to a mass market– Doesn’t matter what you are using the web for
• Search is the common denominator for everyone; a ‘home-base’ from which to begin your journey
– Target web users all over the world– particularly North America, Europe, Russia, Australasia
• Google Advertising:– Targets advertisers whose market frequent the internet– Can be targeted with precision at a local or worldwide level
Google Brand Value
• Household name• Verb in Webster’s dictionary• Interbrand Brand of the year, 2003• Quantifying Brand Value• Google offerings are largely free
– Customer feelings - Love, Loyalty, Share of heart
Competitive Advantage
• Brand image• Infrastructure
– servers, storage systems, hardware• Resource abundance• Scalability• Wide knowledge base
– Ability to branch off into other areas