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MARKETING

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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

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Industrial Vs Consumer Marketing

Areas of Difference Market Characteristics Business Market
Geographically Concentrated Relatively Fewer Buyer

Consumer Market
Geographically Disbursed Mass Market

Product Characteristic

Technical Complex Customized

Standardize

Service Characteristic

Service , timely Availability extremely Somewhat Important Important

Buying Behavior

Involvement of Various functional area Involvement of family members from both the ends Purchase Decisions are performance based and rational Technical Expertise Purchase decisions are mostly based on Physiological /social/psychological needs Relatively less technical expertise is required

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Industrial Vs Consumer Marketing

Areas of Difference Channel Characteristic

Industrial Market
More Direct Fewer Intermediaries

Consumer Market
Indirect Multiple layer of Intermediaries

Promotional Characteristic

Emphasis on Personal Selling

Emphasis on Mass Media (Advertising)

Price Characteristic

Competitive Bidding and Negotiated Prices List Price for Standard Products

List Price or MRP

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B2B Distribution Channel

Manufacturer

Company Sales Force

Representative Agency

Distribution Dealer

Customer 3/10/13 Customer

Customer

Top B2B Brands

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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%

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PESTLE
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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 oftyre industryi.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

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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 3/10/13 towards equally increased demand for complement

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 3/10/13

TECHNOLOGICAL

Radialisation of tyres is likely to result in lower replacement demand. Tyre retreading New Methods like Cold Retreading

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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.

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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.

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SWOT
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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

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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.

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OPPORTUNITY

Strong Growth Infrastructure Development especially roads Shift to redialization can increase profitability in future Global sources for raw material.

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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

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3/10/13

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STPD

Tyre Market Segmentation

MHCV HCV LCV OTR 3/10/13

Medium Heavy Commercial Vehicles Heavy Commercial Vehicle Light Commercial Vehicle Off the Road

Market Targeting
MRF : Compete Market Coverage
o

MRF holds a diversified portfolio of products spanning the entire tyre market.
M1 (Cars) P1 M2 (Trucks) M3 (2-wheelers) High Grip Tyres

Touring Tyres Economy Tyres Sport Tyres

P2

Mileage Tyres Touring Tyres

P3
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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 M1 M2 M3 tyres.
(Cars) (Trucks) P1 P2 P3
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(2-wheelers)

Touring Tyres Sport Tyres 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

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

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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 Quality Safety Durability Grip Economy etc.
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(POD):-Point Of Differentiation High Endurance Tyres High Performance Tyres

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4Ps

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Product

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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

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Augmented Benefits
Bridgestone
Value Proposition Quality, Comfort and Value for Money
Quality- International Standards

MRF
Value Proposition Quality and Endurance
Quality- International Standards

Comfort- Smooth and Quite Endurance- Durability on Value for Money tough Indian roads

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Product Mix Dimensions Click to edit Master

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Passenger Two Wheelers Cars ZVTV(7) Zapper FV(1)

Trucks-Buses Farm Services Super Miller99(4) Steel Muscle SIT4(2) Steel Muscle (3) The Lug Plus(4) Muscle rokx(4)

LCV

SCV Steel Master(1) Steel MuscleR(1)

Shakti Superlug Super-(12) 50 plusR(1) Shakti Life(12) Rib(7) Superlug 505(2)

ZLO(4) VTM(1)

Zapper FM(1) Zapper FS(3)

Supermiler Zigma(2) 99 (3)

SLM(2)

Rib Plus(6)

Trailer707( Supermiler Savari 2) 95 (1) Trek(1) Power Tiller(1) Superlug(1)Savari Lug(1) SuperlugR(1) Savari (1)

ZQT(8) ZTX(5) ZSLK(4)

Meteor(2) Zapper YM(1) Zapper Y(8)

Muscle rok(1) Fork Lift Solid(10) M-77(5)

Pneumatic( Steel 5) Master (1)

ZEL(3)

Zapper Q(8)

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Superlug 50 plus R(1)

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Passenger Cars ZV2K(20)

Two Wheelers

Trucks-Buses

Farm LCV SCV Service

Zapper C(5)

Superlug 50 plus (2) Superlug 50(3)

ZVT(20) ZCC(2) ZGT(2) ZGP(5) ZVTS(40) NDMS(10) Safari(10) 3/10/13

Moto-D(4) Moto-C(3) Nylogrip - ST Plus(1) Nylogrip Plus(7) Nylogrip Plus FE(1) Zapper D (1) Nylogrip Plus(2)

Passenger Two Cars Wheelers Big Rover (2) Estate(1) Swgg(4) SM-12(4) Legend(3)

TruckBuses

Farm Services

LCV

Product Mix=304
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Place
First Identify the Customer Base

Replacement OEM Exports

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Distribution Channels (Direct and Indirect)

Direct Channels OEM Direct Supply to Automobile Manufacturer - Bulk Quantity - Exclusive Channel - Cater Just In Time for OEM - Sometimes may use C & F agents

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Indirect Channel

One or more intermediaries between tyre manufacturer and final consumer

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Channel Length

No of intermediaries between Manufacturer and end user

Channel Management

Selection of Dealer

Training and motivating Channel Members

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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 3/10/13

Promotion

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

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The official blimp sponsor of IPL 2010 the MRF blimp at the Chinnaswamy Stadium in Bangalore.

The blimp is 19 metres long, 400 cubic metres of Helium, maximum height of 1000 feet
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PRODUCT LIFE CYCLEPLC Click to edit Master

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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.
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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 .
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LOWER PRICES AS COSTS LOWER,KEEPS

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 3/10/13 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.
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Product Life Cycle For Tyre Industry

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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

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TV commercial

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