Bridgestone and MRF Tyre Industry

Bra dSt t y A a s B and rategyAnalysis
A AmritaViveka anand(09 9005) D DivyaKiron
BrandStrategyAnalysis
TableofContents
SectionIBridgestoneIndia&MRF:AnIntroduction Chapter1IndianTyreIndustry:ABri
1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 OverviewoftheIndianTyreIndus
fMarketing SalesandProfitability TrendsinthePastYears CurrentStatusan
dia" MajorPlayersandMarketShares EnvironmentAnalysis SwotAnalysisforthe
nes 5 5 5 5 6 6 6 7 8 9 9 10 11
SectionIIMarketingStrategies Chapter1AnalyzingtheMarketingEnvironment
1 1.1 1.2 1.3 1.4 2 2.1 2.1.1 2.1.2 2.2 2.2.1 2.2.2 2.3 2.3.1 2.3.2 3 3.1 3.
r WhoistheConsumer? RadialTyres:MeetingtheIndianDrivers"UnsatisfiedNeed"
merBehaviour TheCompany CoreCompetencies BridgestoneIndia MRFInd
rs PrincipalCompetitors SalientStrengths&Weaknesses BridgestoneIndia
15 15 15 16 16 17 18 18 18 18 20 20 22 24 24 25 27 27 27 27 1|P a g e
3.3 4 4.1 3.2.2 MRFIndia BasisofCompetition ImportantCollaborators

oratorIncentives 4.2.1 AssuredSupply 4.2.2 AssuredQuality 4.2.3
ronment 5.1.1 UnresolvedTaxIssues 5.1.2 IncreasingCostofRawMaterials
s 5.1.5 SourcesofDemand TechnologicalEnvironment 5.2.1 Indigenous
alPlayers 5.2.3 ImprovedCapacityUtilizationTechniques SocioculturalEnviro
amilies 5.3.2 HigherCarDensityPerFamily 5.3.3 ShiftingAwayfromSavi
32 33 33 35 35 35 35 35 35 35 36 37 37 38 38 39 39 39 39 40 40 41 41 4
4.2
5 5.1
5.2
5.3
Chapter2Segmentation,Targeting&Positioning
1 2 2.1 2.2 3 3.1 3.1.1 3.1.2 3.2 3.3 3.3.1 3.3.2 3.4 3.4.1 3.4.2 3.5 3.5.1
eTypes SelectingtheTargetSegment Bridgestone:TheMarketSpecializationApproach
ageApproach DifferentiatingandPositioningStrategies EstablishingCategoryMembershi
ancewithValueforMoney MRFTyreswithMuscle PointsofParity Points
eQuality&ValueforMoney MRFEnduranceGuaranteed PositioningStatements
3.5.2 MRFTyreswithMuscle
Chapter3AnalyzingtheMarketingMix
1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 2 2.1 2.2 2.2.1 2.2.2 2.2.3 2.3 2.3.1 2.3.2 2.3.
2.1 4.2.2 4.2.3 TheProduct ProductLevelsTheCustomerValueHierarchy Co
ndPullStrategiesinChannelMarketing ChannelDesign DirectandIndirectChan
tPractices SelectingChannelMembers TrainingandMotivatingChannelMembe
cPricingStrategiesintheTyreIndustry DealerDiscountsandAllowances ProductPromo
tionMix DevelopingEffectiveCommunications IdentifyingtheTargetAudience
mmunication
Chapter4MarketFeedbackandControlMechanisms SectionIIIMarketingStrategies:ARe
zingtheOverallMarketStrategies
1 1.1 1.2 1.3 AnalysisoftheOverallMarketingStrategies MarketingStrategyAnalysi
gyAnalysis CreatingValue 1.3.1 BridgestoneQualityandValueforMoney 1.
ue PricingPhilosophies SustainingtheValue BuildingRelationships RatingtheMa
tone&MRF
43 44 44 44 45 45 45 45 47 47 48 48 50 50 50 50 51 52 54 54 55 56 56 5
1.4 1.5 1.6 1.7
76 76 76 78 80 80 80 80 81 81 82
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CHAPTER1
BRIDGESTONEINDIA & MRF ANINTRODUCTION

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THEINDIANTYREINDUSTRY
ABRIEFANALYSIS
1. OVERVIEWOFTHEINDIANTYREINDUSTRY:
1.1 An Introduction to the Indian Tyre Industry
The Rs.20,000 crore Indian Tyre Industry, is highly raw material intensive and p
redominantly a Cross Ply (or Bias) tyre manufacturing industry. It is highly con
centrated wherein 10 large manufacturers account for over 95% of the total tonna
ge production of 11.35 lakh M.T. It produces all categories of tyres, except Sno
w Tyres and Aero Tyre for which there is no demand domestically. 1.2 Key Influen
cers The level of economic activity, performance of domestic automotive industry
, and the faring of the transport sector directly influence the performance of t
he tyre industry in India. With the replacement segment dominating the overall t
yre demand, the industry remains inherently vulnerable to economic cycles. While
radialisation has become the norm in the passenger car segment, in the bus and
truck tyre segment, its acceptance is still limited. Bus and truck radialisation
could emerge in the long term as the quality of roads improves and the restrict
ions on overloading are better enforced. The practice of re-treading, which is g
aining increasing acceptance, could pose a challenge to replacement demand in th
e medium term. The ability of the re-treading sector to capture potential replac
ement demand would depend on the awareness among customers (of the benefits of r
etreading) and also the quality of retreading done. Given the low levels of pene
tration of two-wheelers and passenger cars in the country, OEM demand is likely
to increase, which in turn would push up replacement demand with a lag. Slowdown
in automotive industry and global economy in general negatively impacted the In
dian tyre industry in 2009. The industry tonnage growth was only 2.19% during fi
rst nine months of FY 2009, compared to 7.38% growth experienced during the same
period last year. Demand side was also severely affected as almost all auto man
ufacturers were forced to adjust their production last
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year. A major relief for tyre manufacturers was provided by the government by re
ducing the excise duty on tyres from 14% to 10% in December 2008, and further to
8% in February 2009 1.3 Role of Marketing Over the years, tyre manufacturers ha
ve developed a vast marketing network using dealers and depots and as such all t
ypes of tyres are now easily available even in the remotest corners of the count
ry. No doubt, international auto majors in India now roll out their vehicles usi
ng Indian manufactured tyres.
1.4 Sales and Profitability
The Indian Tyre Industry produced 821 lakh units of tyres garnering approximatel
y Rs. 21,000 crore in FY 2009 -2010. The top players are now focusing on brandin
g their products and strengthening their distribution network so as to increase
their market share. The industry derives its demand from the automobile Industry
. While the OEM (Original Equipment Manufacturers) market off take is dependent
on the new vehicle sales, replacement market demand depends on the total populat
ion of vehicles on road, road conditions, vehicle scrapping rules, overloading n
orms for trucks, average life of tyres and prevalence of tyre retreading. 1.5 Tr
ends in the Past Years As the economy in general; and automobile industry in spe
cific slowed down in FY 2009, the tyre demand too came under pressure. The indus
try production registered a 5 year CAGR of 6.44% between FY 04-09. The largest c
ategory of Truck & Bus tyres recorded a 5 year CAGR of 2.96% (slower than the in
dustry average) while Light Commercial Vehicle (LCV), motorcycle and car tyre ca
tegories grew at 6.07%, 10.70% and 6.90% respectively (relatively faster than th
e industry average). Off the Road (OTR) tyre category (customized tyres) which f
etches a higher margin compared to other tyre categories, was the fastest growin
g. The OTR tyre category had registered a 5 year CAGR of over 8.85% in the last
five years. Most of the top players increased their capacity for the production
of OTR tyres so as to improve their product mix, this being a high margin
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product. Also in the face of global slowdown and stiff Chinese competition, the
export market off take declined by 9.82% during this period. On the face of dema
nd-side pressures, the tyre industry saw production adjustments from all the maj
or players in the last couple of months. The government too tried to provide ext
ernal stimulus by effecting 6% excise duty cut across industries (the excise dut
y for tyres was brought down from 14% to 10% w.e.f. December 7, 2008, and then f
urther reduced to 8% w.e.f. February 25, 2009). In all the gloom; one silver lin
ing for the industry was the easing of the raw material prices from September 20
08 onwards. However, their future movement still remains uncertain. Based on dat
a from the Rubber Board, natural rubber prices have risen about 50% in the last
6-7 months. In fact, prices in the Indian market are presently ruling 5-6% highe
r than the same in international markets. As a result, tyre makers are facing si
gnificant rise in cost production. This has forced the industry to begin hiking
prices in an attempt to keep the already thin margins intact. Tyre majors have a
lready hiked prices. Moreover, due to shortfall in domestic supply and increasin
g gap between domestic and international prices of rubber, the tyre manufacturer
s have increased the import of natural rubber. According to estimates by Automot
ive Tyre Manufacturers Association (ATMA), tyre producers are likely to import 5
0% of their total natural rubber consumption due to tight domestic supply. With
profitability of tyre companies having a strong correlation to raw material pric
es and as these companies operate on thin margins, this would remain an area of
concern. 1.6 Current Status & Future Trends As regards to the demand scenario, t
he poor demand growth in FY 2009 - 2010 was primarily on account of decline in O
EM production. Continuation of poor volume growth could affect the profitability
further. Despite these challenges, according to CARE (Credit Rating & Research)
Ltd., while the industry may register a low tonnage growth in FY 2009, the long
term prospective seems to be bright. They expect the industry to experience a C
AGR of approximately 8.21% between FY08 to FY13. Automotive companies have start
ed experiencing increasing sales and raw material prices are stabilizing which w
ill boost tyre sales over the coming months. However, experts suggest there will
be some time lag before profitability picks
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up as tyre manufacturers are still carrying high cost inventories. Though the ou
tlook in the immediate term is uncertain, the long term outlook for the sector r
emains positive. 1.7 Towards the Future Radialisation in India
Radialisation in India though in its infancy in T&B tyre category; is making inr
oads. Most manufacturers have capex plans for radial T&B tyres with no new capac
ity being added for bias tyres. This indicates that the industry foresees radial
isation to take further hold in the T&B tyre category. "Rate of radialisation is
actually an index of the status of road development, vehicle engineering and th
e economy in general". Notwithstanding the problem areas, constraints and limita
tions, the tyre companies have kept pace with the technological improvements tha
t radialisation signifies and offer state-of-the-art product (tyres), comparable
to the best in the world.
Radialisation can be aptly classified as the most important innovation in tyre t

echnology. Despite its several advantages (additional mileage; fuel saving; impr
oved driving) radialisation in India earlier did not catch on at a pace that was
expected, since its introduction way back in 1978. This could be attributed due
to several factors, viz. Indian roads generally not being suitable for ideal pl
ying of radial tyres; (older) vehicles produced in India not having suitable geo
metry for fitment of radial tyres (and hence the general, and wrong, perception
that radial tyres are not required for Indian vehicle; unwillingness of consumer
to pay higher price for radial tyres etc.
However, the situation has radically changed in recent years, especially for the
passenger car tyre segment where radialisation has crossed 98% mark and is expe
cted to reach 100% in two to three years. In the Medium and Heavy Commercial veh
ical segment current level of radialisation is upto 8%, and that in the LCV segm
ent is estimated at 18%.
A few years back a beginning was made in Radialisation of truck and bus and LCV
tyres and this process is gaining momentum.
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BrandStrate egyAnalysis
1.8 Maj Players a Market S jor and Shares
major players inc p clude MRF Ltd. whic is the ch market leader (2 22% marke sha
re) followed et closely by Apollo Tyres Ltd (21%). T other o d. The players are
JK Tyre & Indust e tries Ltd. major p (18%), Ceat Ltd. (13%), B . Birla Tyres (1
0%), s ear and Bridges stone (5%) On an ). Goodye (7%) a average 55% of th produ
ctio is for rep e, he on placement market, followed b 29.8% so to OEM directly ,
by old Ms and the remaining is exported.
7 10
Ceat C MRFTyres M
5 4 22 21 18
ApolloTyres A J.K.Tyres J
13
Birla B Goodyear G Bridgestone B Others O
1.9 Env vironment analysis Ma forces s ajor shaping the trajectory o the tyre in
of ndustry
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1.10 Swot Analysis for the Tyre Industry

Strengths Established brand names (key in the replacement market) Extensive dist
ribution networks - For example, Apollo Tyres has more than 118 district offices
, 12 distribution centres and 4,250 dealers. Good R&D initiatives by top players
. Weaknesses Cost Pressures - The profitability of the industry has high correla
tion with the prices of key raw materials such as rubber and crude oil, as they
account for more than 70% of the total costs. Pricing Pressures The huge raw mat
erial costs have resulted in pressure on the realisations and hence, the players
have been vouching to increase the prices, although, due to competitive pressur
es, they have not been able to pass on the entire increase to the customer. High
ly capital intensive - It requires about Rs 4 billion to set up a radial tyre pl
ant with a capacity of 1.5 million tyres and around Rs 1.5-2 billion, for a cros
s-ply tyre plant of a 1.5 million tyre-manufacturing capacity. Opportunities Gro
wing Economy leads to Growing Automobile Industry leads to Increasing OEM demand
that in turn leads to Subsequent rise in replacement demand With continued emph
asis being placed by the Central Government on development of infrastructure, pa
rticularly roads, agricultural and manufacturing sectors, the Indian economy and
the automobile sector/ tyre industry are poised for an impressive growth. Creat
ion of road infrastructure has given, and would increasingly give, a tremendous
fillip to road transportation, in the coming years. The Tyre industry would play
an important role in this changing road transportation dynamics.
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Access to global sources for raw materials at competitive prices, due to economi
es of scale. Steady increase in radial Tyres for MHCVs and LCVs. Threats Continuou
s increase in prices of natural rubber, which accounts for nearly one third of t
otal raw material costs. Cheaper imports of Tyres, especially from China, sellin
g at very low prices, have been posing a challenge. The landed price is approxim
ately 25% lower than that of the corresponding Indian Truck/ LCV tyres. Imports
from China now constitute around 5% of market share. With crude prices scaling u
pwards, added pressure on raw material prices is expected Ban on Overloading, le
ading to lesser wear and tear of tyres and subsequent slowdown in demand. Howeve
r, this would only be a short-term negative. Cyclical nature of automobile indus
try.
1.11 The Companies and Major Product Lines Bridgestone India Private Limited Bri
dgestone Corporation, Japan was established in the year 1931. Today, the company
is a US $23.2 billion Corporation with its headquarters at Tokyo. It controls 1
8.2% of global market and sells products in over 150 nations. The company has 47
tyre plants and 93 non-tyre plants, 3 technical research and development centre
s and 10 proving grounds. Today, Bridgestone has a worldwide work force of more
than 110,000 employees. It is a global tyre manufacturing company, which emphasi
zes on Japanese traditions. It is still growing and expanding and aiming at incr
easing its share in the world tyre and tubes, industrial rubber products like be
lts, hose, chemical products, sporting goods, automotive parts, electro material
s and marine products etc. Bridgestone India Private Limited (BSID) is one of th
e leading tyre manufacturers in India. It began as a joint venture between Bridg
estone Corporation of Japan (BSJ) and The Associated Cement Companies of India L
td. (ACC), in 1996.
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Their first plant was established at Kheda (Madhya Pradesh) with a paid up capit
al of Rs. 2753 million. With the latest technology from Bridgestone, Japan, the
plant at Kheda, covering 265,500 sq. mts. was officially inaugurated on 12th of
November 1998. Presently BSID has a state-of-the-art manufacturing facility near
Indore, Madhya Pradesh and is continuously increasing the production capacity i
n order to meet market requirements. Here they manufacture the widest range of s
teel belted radial tyres for almost all the cars & multi-utility vehicles, produ
ced in India. These manufacturing facilities are backed by the highly sophistica
ted Bridgestone Technical Centre at Tokyo, the main out of the 4 Technical Cente
rs worldwide, which performs rigorous research & development activities to offer
most appropriate tyres for Indian roads. Over a period of time the company has
established a distinct culture with various HR principles and systems. With a st
rong work force of around 900 employees, it has continuously strived to contribu
te to the Indian Society and realize happiness by achieving targets with mutual
trust and understanding. Products BSID has come a long way in establishing itsel
f as a leader in Radial tyres segment, producing around 2.7 million tyres per ye
ar. The products include Passenger steel belted radial tyres and tubes and Light
commercial vehicle steel belted radial tyres and tubes. These tyres are used fo
r passenger cars in India and are supplied to almost all the major Original Equi
pment Manufacturers. Tyres are the strength and passion of BSID, a force that ha
s driven them to be one of the best in the business. As a premier player in the
Indian tyre market, Bridgestone continues to give its customers a range of innov
ative products and services. Recent Forays Bridgestone India launched two new ty
re range B250 and ER 300 which is likely to help cement its place as a leading t
yre supplier in the Original Equipment Manufacturers and replacement market in t
he country. The performance or comfort tyre range ER300 has capabilities for run
ning in wet and dry conditions. The B250 variants received approvals from OEMs l
ike Honda and Hyundai for its Civic and Verna models respectively. Bridgestone h
as around 30 percent market share (radial tyre segment) in OEM and replacement m
arket, in the country. The company expanded its facility near Pune from around 1
0,500 tyres per day to more than 11,000 tyres per day to be achieved by the end
of the 2008. The company was in the process of upgrading its facility and automa
ting its manufacturing process to optimise efficiency to ensure consistent and s
teady supply to customers.
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MRF Established in 1946 as a small toy balloon manufacturing unit in a shed at T

iruvottiyur, Madras (now Chennai), MRF ventured into the manufacture of tread ru
bber in the year 1952. The quality of the product was so high that by close 1956
MRF had become the market leader with 50% share of the tread-rubber market in I
ndia. In 1961, MRF entered into tyre manufacturing in collaboration with the Man
sfield Tire & Rubber Company of USA. Since then MRF has come a long way towards
achieving greater heights in the automotive tyre industry, with 6 manufacturing
units in India. It has a huge distribution network of 2,500 outlets within India
and exports to over 65 countries worldwide. . Today, MRF is the market leader a
mong tyre manufacturers in India, with a 24% share terms of revenues. Its leader
ship position, coupled with its strong brand recall and high quality, MRF comman
ds the price-maker status. MRF has a strong presence in the T&B segment, the lar
gest segment of the tyre industry, and commands around 19% market share in the s
egment. It is the leader in the two/ three-wheeler segment (including motorcycle
s) and tractor front tyres, and holds second place in the passenger cars and tra
ctor - rear tyres. Exports account for around 12% of the gross sales in MRF. Pro
ducts MRF is the leading manufacturer of tyres for almost all segments. Being dr
iven by technology and product innovation, every tyre that comes out is of the h
ighest standards and tested to weather the toughest conditions on any road. With
more than 85 tyre variants, MRF holds the highest market share of 22% in terms
of sales volume in the tyre industry. Apart from tyre manufacturing tyres, MRF a
lso manufactures its MUSCLEFLEX brand of Conveyor Belting at one of the most adv
anced, State of the Art , Facilities in India. Incorporating the latest manufac
turing techniques, MUSCLEFLEX-Conveyor Belting has gained rapid acceptance in ma
rkets worldwide. MRF PRETREADS is yet another innovation from MRF Industries whi
ch is the most advanced precured retreading system in India. MRF forayed into re
treading as far back as 1970. Today, MRF has perfected the art of recured retrea
ding with its extensive knowledge in tyres and rubber. MRFs diverse business inte
rests also include Paint and Coats, and Toys. Recent Forays Became the first dom
estic company to venture into the niche area of developing and manufacturing of
aviation tyres branded Aero Muscle for helicopters and aircrafts which targe
ted the defence sector. The critical raw materials were sourced from overseas su
ppliers. It is estimated that the company invested more than Rs 150 crore to set
up the new production facility at its existing plant in Medak district of Andhr
a Pradesh.
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CHAPTER2

MARKETINGSTRATEGIES

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ANALYZINGTHEMARK KETEN NVIRON NMENT T

THEFOURCAP PPROACH

1. THEMINDO OFTHE
C
ONSUM MER:
1.1 Wh hoistheCo onsumer? While M MRF has es stablished a wide footp print and an over
ll lea across th entire tyr market in n ad he re n India, B Bridgestone has emer
ge as a clear market lea ed r ader in the n niche Passenger Car Se egment. For r
compar rative purpo oses betwee these com en mpanies in this study, we shall co
onfine ourse elves to the e niche se egment of R Radial tyres in the Passenger
Car s segment. The typ pical consum in this report is a Indian Passenger Car own
er, w is look mer an who king for the e best-fit tyre for his car. Also, si ince
Bridge estone and MRF suppl tyres to OEM (Orig ly ginal Equip pment Manu ufactu
rers)* * and Tyr dealers, these busin re ness-to-busi iness partne are anot ers
ther target consumer s segment for r the com mpanies. Target c customers: 1) The
Indian passenger c owner car 2) OEMs 3) Tyre dealer rs
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1.2 RadialTyres:MeetingtheIndiandriversunsatisfiedneed As with consumers across

n India, the Indian drivers mind has always been preoccupied with value for money.
The Indian driver measures this value for money in many ways: through improved m
ileage, lower maintenance cost, improved safety, higher average life, or even im
proved drive comfort. The Indian driver had for long put up with poor road infra
structure, unreliable traditional nylon threaded cross-ply tyres, higher mainten
ance costs and a very uncomfortable driving experience. There was a clear need f
or a better tyre technology. Radial tyres, with their promise of far better ride
comfort, mileage and product life, seemed like the logical choice. However, tho
ugh radial tyres were introduced into Japanese and American markets way back in
1960, It was not until 1998 (when Bridgestone entered the Indian market with its
line of radial tyres), that Indian car owners were finally able to lay their ha
nds on radial tyres. The OEMs were quick to adopt the technology and started rol
ling out their new cars on radial tyres. What followed was a mass radialization of
the passenger car market. So much so, that today, radial tyres have a 98% marke
t share in the Indian passenger car tyre market. It was clearly a case of bringi
ng in the right product to address the unsatisfied need of the customer. 1.3 Buyin
gaRadialTyre:Keydecisionmakers Unlike FMCG products, buying a radial tyre is usually
t done on impulse. At an average price of Rs.12,000/- , radial tyres are not a c
heap buy for the average Indian middle-class family. Some amount of research and
thought goes, before deciding on the ideal tyre. Studies show that an average c
ar tyre buyer looks for reviews from different sources such as mechanics, dealer
s, OEM endorsements and also from close friends and family. These sources hold a
lot influence over which brand of tyre the consumer decides to buy. Key decisio
n influencers in buying a tyre: 1) The local mechanic 2) Tyre dealers 3) OEM end
orsements 4) Close friends and family
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1.4 ConsumerBehavior Frequency of purchase in the passenger car tyre industry is s

olely decided by the life of an average tyre. Depending on the kind of usage, an
average radial tyre can last anywhere between one to five years.
Carusertype Taxi(commercial) Averagebusiness traveler Averagefamily Average
45
Quantity of purchase in the car tyre industry varies within a given year. The pa
ssenger car tyre market displays moderate seasonality in sales. Higher sales usu
ally correspond with periods when there is an increased use of passenger vehicle
s, such as during school vacations (family outings), school reopening, and local
festivals and occasions (for example, the Sabarimala pilgrimage season drives u
p the sale of tyres significantly in and around Coimbatore). Since Tyres are a d
erived-demand product (its demand is derived from the demand for automobiles) go
vernment policies such as a drop in duties and taxes on car manufacturers, also
indirectly contribute to higher tyre sales. Given the high amount of product hom
ogeneity in the tyre market; prices do not vary greatly between companies. Howev
er, international players such as Bridgestone do markup their prices slightly hi
gher on account of their superior quality and the extended warranties. On an ave
rage, the buyer is usually more concerned about the performance of the tyres tha
n its price.
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2. THE
C
OMPANY:
2.1 CoreCompetencies: 2.1.1 BridgestoneIndia: International Quality and pedigree:

ty counts as the number one reason why OEMs prefer Bridgestone over other tyre m
anufactures. Bridgestone has always banked on its quality USP to capture market
share. The Japanese attention to quality seems to have percolated down to Bridge
stone India from its parent company. World over, the Bridgestone brand has been
synonymous with cutting-edge technology and quality. The F1 association:
TheglobalbrandawarenessthatBridgestoneCorporationscollaborationwithF1has earneda
nasaleaderintheglobaltyreindustryhashelpeditsIndian arm,BSID,positionitselfa
ntheIndianmarket.
Channel reach: With over 3000 distributors and dealers, Bridgestone India has on
e of the largest reach across the country. A Bridgestone dealer is never far awa
y from you, no matter where you are. 2.1.2 MRFIndia Undisputed overall market leade
r: With a 24% share in the overall tyre industry MRF is the king of tyres on the
Indian road. Its Leadership position, coupled with its strong brand recall and
high quality, MRF commands the price-maker status. MRF has a strong presence in
the T&B segment, the largest segment of the tyre industry, and commands around 1
9% market share in the segment. It holds the second place in the passenger cars.
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Complete market coverage: Over the years, MRF has created a formidable product l
ine, length and breadth to serve every segment of the industry. Its complete mar
ket coverage is one of the reasons why it is the undisputed market leader today.
MRF offers tyres for the following vehicle segments in the tyre industry: 1) Pa
ssenger Cars 2) Two wheelers 3) Heavy Commercial Vehicles (HCV) 4) Light Commerc
ial Vehicles (LCV) 5) Of the Road Vehicles (OTR) 6) Farm Vehicles (FV) Brand rec
ognition and brand recall: When it comes to top-of-mind brand recall, MRF beats
the rest of the competition hands down. Unlike Bridgestone India, MRF has for lo
ng concentrated on aggressive brand promotion. Sports celebrities and event endo
rsements have been a major vehicle for their brand promotion activities. From si
gning on three sports heavyweights at one go (Sachin Tendulkar, Brian Lara, and
Steve Waugh), to endorsing national rally circuits, to founding the MRF pace fou
ndation, MRF has been at the forefront of aggressive brand building: one reason
why MRF commands more brand recognition than Bridgestone India, despite the latt
ers superior quality and international credentials.
Strong exports: Exports account for around 12% of the gross sales in MRF. The co
mpany exports to over 65 countries worldwide. It is largest tyre exporter in Sou
th Asia. Over the past decade, MRF has improved its technologies and tyre qualit
y significantly, to compete effectively with other players in the international
market. Most of its exports are non-radial, nylon cross-ply tyres, and are expor
ted to other developing countries such as Sri Lanka.
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2.2 CompanyResources 2.2.1 BridgestoneIndia
Source:Aut
The Tyre industry is driven more by volumes than by margins. Bridgestone being o
ne of the big five players in the global tyre industry, generates an annual tyre
production equivalent to the total demand of the Indian market.
Pedigree:
Bridgestone India Pvt. Ltd (BSID) is a fully owned subsidiary of Bridgestone Cor
poration headquartered in Tokyo, Japan. The global company employs over 133,500
people worldwide and has offices, factories or continental headquarters in more
than 150 countries. [1]
MNCs like Bridgestone Corporation have deep pockets and can easily withstand losse
earsor more.Theirfinancialmusclesalsopermitthemto investinR&D,whichisbeyondth
yremanufacturer.
Resources:
Bridgestone India set up base in India in February 1996 and set up the factory t
wo years later at Kheda near Indore in Madhya Pradesh. The company is one of the
leading tyremakers in both the OEM and replacement markets in the country.The c
ompany has a production facility at Pithampur near Indore and has announced an i
nvestment of Rs259 crore for expansion. This will increase production capacity b
y over 40% to 15,000 tyres per day by the middle of next year. [2]
Workforce:
As a part of the expansion plans, Bridgestone plans to hire 300 more people to i
ts 700 hundred strong Indian workforce in the coming financial year.
Technology:
The name Bridgestone has been synonymous with cutting edge technology for some t
ime now. Over the years, the company has benefited directly from its involvement
in Formula One racing. The lessons learned through Bridgestones successful parti
cipation at F1 circuits have translated into innovations that can be applied to
the design and manufacture of high performance tyres. The global brand awareness
that
20|P a g e
Bridgestone Corporations collaboration with F1 has contributed

n as a leader in the global tyre industry has helped its Indian
ion itself as a premium tyre manufacturer in the Indian market.
dable reputation for quality and high-end technology has helped
he most preferred tyre supplier to OEMs, which accounts for 24%
senger car tyre market in India. [3]
Financialhealth:
and its recognitio

arm, BSID, posit
Also, this formi
BSID emerge as t
of the total pas
Y.E. / as on Dec.31
Working Results Total operating income PBILDT Interest Depreciation PBT PAT (aft
er deferred tax) Gross cash accruals Financial Position Equity share capital Net
worth Total capital employed Key Ratios Growth in Total operating income (%) Gr
owth in PAT (%) Profitability PBILDT/Total Op. income (%) PAT/Total income (%) R
OCE (%) Solvency Long-term debt equity ratio (times) Interest coverage (times) L
iquidity Current ratio (times) Quick ratio (times) Turnover Average collection p
eriod (days) Average creditors (days) Average inventory days Total operating cyc
le (days)
2008
626 138 10 38 91 56 110 275 329 481 21.69 15.68 21.97 9.01 24.22 0.14 10.04 1.16
0.44 36 60 103 79
The long term debt equity ratio seems to be very healthy but the reason for that
is because its a 100% fully owned subsidiary Co. The same can also be said about
the interest
21|P a g e
coverage ratio. The raw material costs form a major chunk of overall operating e
xpenditure and so any fluctuation in that area could affect the Cos overall pros
pects adversely. This is also visible from the fact that the operating margin is
very low as can be deduced from the PAT/Total income percentage. The current ra
tio and the quick ratio are pretty decent. However the average inventory days se
ems to be a cause for concern. This could be due to the recession which has also
hit overall demand for automobiles in general. Yet the growth in total operatin
g income and PAT are welcome signs.
2.2.2 MRFIndia Infrastructure MRF primarily produces tyres at its seven plants loc
ated in various places in South India. The companys installed tyres capacity as o
n September 2008 was 25.3 mn tyres. Tubes capacity stood at 26 mn numbers as on
Sep08. Other business operations of the company (account for 6% of sales) consist
of manufacturing pre-cured treads, tread rubber, conveyor belts, specialty surf
ace coatings etc. The details of capacity utilization in respect of tyres in the
last few years are given below: Strong demand growth particularly in the passen
ger car and LCV tyres segment over the last five years has assisted MRFs capacity
utilisation staying well above 90% (except FY05). The high capacity utilisation
is despite companys installed capacity of tyres having grown from 17.4 mn tyres
p.a. in Sep04 to 25.3 mn p.a. in Sep08. In tonnage terms, truck & bus tyres accoun
ted for more than 50% of the production followed by tyres for passenger cars, mo
torcycles and LCVs. MRF also manufactures tyres for Tractors, Scooters, Off The
Road vehicles etc. Market Leader in overall Indian tyre market MRF has the advan
tage of being the undisputed leader in the overall tyre market. MRF has with its
portfolio of tyres for the complete automobile market, has made its presence fe
lt in all segments of the tyre market. While it is the leader in 2 wheeler and L
ight Commercial Vehicle tyre markets, it comes a close second in the Heavy Comme
rcial Vehicle and Passenger Car tyre markets. Strong exports: Exports account fo
r around 12% of the gross sales in MRF. The company exports to over 65 countries
worldwide.
22|P a g e
Financial health:

Y.E./asonSep30
WorkingResults Netsales Totaloperatingincome PBILDT Interest Depreciation PBT
Grosscashaccruals FinancialPosition Equitysharecapital Networth ByTotalcapital
wthinTotalincome(%) GrowthinPAT(%) Profitability PBILDT/TotalOpincome(%) PAT
ency Longtermdebtequityratio (times) Interestcoverage(times) Liquidity Currentra
kratio(times) Turnover Averagecollectionperiod(days) Averagecreditors(days) Avera
ays)
2008
5047 5150 422 66 170 211 142 311 4 1121 2380 14.77 17.35 8.2 2.76
The long term debt equity ratio is pretty healthy. The raw material costs form a
major chunk of overall operating expenditure and so any fluctuation in that are
a could affect the Cos overall prospects adversely. This is also visible from th
e fact that the operating margin is very low as can be deduced from the PAT/Tota
l income percentage. There has been a decline in PAT over the last year and that
is a cause for concern but it could be attributed to the recession that hit the
economy .The current ratio and the quick ratio are
23|P a g e
pretty decent. The intense competition in the sector has also had its impact on
the Co going by its PAT/Total Income percentage. 2.3 ConcernAreas: 2.3.1 Bridgeston
eIndia
Lowmarketcoverage:
Though Bridgestone has been in India for over a decade now, it has restricted it
self almost entirely to the passenger car radial tyre segment. Even though Bridg
estone is the undisputed leader in this segment with a market share of over 30%,
the passenger car segment accounts for a meager 21% of the total tyre market in
India. There is a huge untapped tyre market outside this segment, especially in
the Heavy Commercial Vehicles segment.
Source:ATMA
Brandrecognitionandrecall:
Bridgestone is one of the leading brands world over. Its association with the F1
racing event has given it a very high visibility and a formidable reputation of
being a technology leader. Yet, when it comes to the Indian market, MRF seems t
o have beaten it at the brand promotion game. While Bridgestone is the preferred
tyre supplier to OEMs (due to its superior quality and durability), customers i
n the Replacement market (market for replacement of worn out OEM tyres) seem to
recall the MRF brand more often than Bridgestone.
24|P a g e
This is mainly due to the fact that while MRF pursues a pull strategy through ag
gressive brand promotion activities to gain top-of-mind recall, Bridgestone bank
s on a push strategy by maintaining close Channel relations, heavy dealer incent
ives and quality as a value proposition, to push its tyres through to the custom
er.

When we consider the fact that the replacement market accounts for nearly 54% of
the passenger car tyre market as seen below, we see the huge opportunity that B
ridgestone seems to be missing here.
S
2.3.2 MRFIndia
LateentrantintotheRadialtyremarket:
With a current market share of 24% MRF has a firm grip over the tyre PassengerCarT
yreSegment market in India. However, back in 1998, when Bridgestone entered the I
ndian market, none of the Indian MRF 18% manufactures including MRF had a 34% JKT
yres radial tyre product portfolio. 17% Bridgestone Bridgestone seized the first
-mover advantage and quickly capitalized on Others 31% the trend of passenger ca
r OEMs adopting the radial tyre technology. By the year 2000, Bridgestone India
had consolidated its position as the No.1 leader in the passenger car tyre marke
t, which was by now almost entirely radialized.
25|P a g e
Though MRF had introduced the ZIGMA CC Radial

he technology and expertise to produce a good
s for all car types. But MRF has taken up the
ously developed its radial technology. Today,
rket share of 18% in the passenger radial car
stone India.
Dealerrelations:
tyre way back in 1989, it lacked t

product line-length of radial tyre
challenge in a big way and indigen
it has succeeded in capturing a ma
tyre market, second only to Bridge
MRF has aggressively pursued a Pull marketing strategy to sell its tyres. In a p
ull strategy, the manufacturer uses advertising, promotions and other forms of c
ommunications to induce the consumers to demand the product from the dealers. MR
F therefore almost exclusively concentrates on brand awareness exercises, such a
s advertisements and endorsements. Compared to other tyre manufacturers, MRF pay
s little attention to incentivizing the dealers. This is reflected in the low ma
rgins it offers, and the complete absence of dealer incentives such as complimen
ts, free trips, cash rewards, discounts, etc. Yet, dealers are motivated to stoc
k MRF tyres simply because they have high brand-recall and so the customer deman
ds it.
26|P a g e
3. THE
C
OMPETITORS:
3.1 PrincipalCompetitors: The Passenger Car Radial tyre segment is a highly concent
rated one. The top 4 players together hold almost 77% of the market share. Bridg
estone is the clear leader in this segment, with a market share that is twice th
at of its nearest competitor, MRF. Bridgestone India leads the pack with a marke
t share of 31%. Its closest competitor, MRF, is far behind with a market share o
f 18%. JK Tyres follows close at the heels of MRF with a market share of 17%, wh
ile Apollo tyres has a market share of 11%.

PassengerCarTyreSegment
18% 17% 31%
MRF JKTyres Bridgestone Others
34%
3.2 Salientstrengthsandweaknesses: 3.2.1 BridgestoneIndia International Quality an

igree: World over, the Bridgestone brand is synonymous with top quality and F1 c
lass performance. This brand image seems to have percolated down to its Indian s
ubsidiary too.
Channel reach With over 3000 distributors and dealers, Bridgestone India has one
of the largest reach across the country. A Bridgestone dealer is never far away
from you, no matter where you are. The F1 association: The global brand awarene
ss that Bridgestone Corporations collaboration with F1 has contributed and its re
cognition as a leader in the global tyre industry has helped its Indian arm, BSI
D, position itself as a premium tyre manufacturer in the Indian market. Financia
l muscle:
Bridgestone being one of the big five players in the global tyre industry, gener
reproductionequivalenttothetotaldemandoftheIndianmarket. 27|P a g e
Niche player: One of its major weaknesses id that Bridgestone India has restricte
d itself almost entirely to the passenger car radial tyre segment. Even though B
ridgestone is the undisputed leader in this segment with a market share of over
30%, the passenger car segment accounts for a meager 21% of the total tyre marke
t in India. There is a huge untapped tyre market outside this segment, especiall
y in the Heavy Commercial Vehicles segment. 3.2.2 MRF Brand recognition and brand
recall: MRF with its aggressive marketing campaigns is has established itself t
he top brand in terms of brand-recognition and recall. A study suggests that 9 o
ut of every 10 tyre customer across all segments of the tyre market, are aware o
f the MRF brand. Complete market coverage: MRF with its portfolio of tyres for t
he complete automobile market, has made its presence felt in all segments of the
tyre market. While it is the leader in 2 wheeler and Light Commercial Vehicle t
yre markets, it comes a close second in the Heavy Commercial Vehicle and Passeng
er Car tyre markets. Strong exports: Exports account for around 12% of the gross
sales in MRF. The company exports to over 65 countries worldwide
Dealer relations: MRF almost exclusively concentrates on brand awareness exercis

es, such as advertisements and endorsements. It believes in making the customer
demand its products through brand-awareness and brand-recall. Therefore, compare
d to other tyre manufacturers, MRF pays little attention to incentivizing the de
alers. Yet, dealers are motivated to stock MRF tyres simply because they have hi
gh brand-recall and so the customer demands it. Late entrant to the Radial tyre
market: MRF was a late entrant into the radial tyre market. Bridgestone capitali
zed on its firstmover advantage in the radial tyre segment, to capture a 31% mar
ket share. MRF has been working hard to catch up, by aggressively developing its
radial tyre technology. As a result, today it holds 18% of the radial car tyre
market share.
28|P a g e
3.3 Basisofcompetition: Being a homogenous product, there is not much difference in

products offered by competing tyre manufacturers. However, companies do try to d
ifferentiate themselves by outdoing one another in some Points of Parity, such a
s quality, safety, tread design, economy, etc. Some important parameters that co
nsumers look out for, and that form a basis for differentiation between tyre com
panies are:
1) High performance tyres (sports) Both MRF and Bridgestone offer high performan
ce tyres that are meant for sports and other high endurance activities.

2) Comfort tyres (touring) Touring tyres offer the twin advantage of endurance w
ith superior ride comfort. These class of tyres are a favorite amongst long dist
ance car drivers such as business travelers.

3) Mileage One of the biggest value propositions of radial tyres is the improved
mileage that it brings with it. Mileage is the top priority for the Indian midd
le class buyer.
4) Price Tyre prices play a much smaller role in the passenger car tyre industry
, compared to tyre features. Consumers are more concerned about the attributes o
f the tyre (quality, durability, etc) than its price. 5) Wear life The wear life
of a tyre determines the life if the tyre. The more durable a tyre, the higher
will be its wear life.
6) Grip Given the high seasonal differences in India, consumers typically look f
or tyres that suit their local climate. Thus, while consumers in Rajasthan look
for tyres that can endure high temperatures; consumers down south prefer tyres t
hat can grip the road even in the worst of monsoon seasons.
7) Cornering and braking Cornering and braking refers to the way a tyre handles
the extreme shear and frictional forces it experiences when the vehicle cuts cor
ners or brakes at high speeds. Superior braking and cornering performance is alw
ays desired by sports and highway drivers.
29|P a g e
4. IMPORTANT
C
OLLABORATORS:
4.1 UpstreamCollaborators: 4.1.1 BridgestoneIndia Bridgestone India is the most pref
erred Tyre manufacturer to most of the car OEMs in India. This is clear from the
formidable list of OEMs that source their tyres from MRF. In fact, some OEMs li
ke Skoda source their tyres exclusively from Bridgestone, and no other tyre manu
facturer. Automobile OEMs who source their tyres from Bridgestone India are: 1)
Toyota 2) Hyundai 3) Skoda (exclusive customer. 100% Bridgestone tyres) 4) Merce
des 5) BMW 6) Genral Motors 7) Ford 4.1.2 MRFIndia When compared to Bridgestone, M
RF has a shorter list of tie-ups with OEMs in the car segment. But it more than
makes up for this shortage by supplying to almost every kind of Automobile OEMs,
be it two-wheelers, cars, buses, trucks, tractors, or OTR (Off The Road) vehicl
es. Automobile OEMs who source their tyres from MRF India are: 8) Maruti 9) Mahi
ndra &Mahindra 10) TATA motors 11) Gneral Motors

30|P a g e
4.2 CollaboratorIncentives: Automobile OEMs tie-up with well-established tyre manu

facturers for three major reasons: 4.2.1 Assured supply Automobile OEMs have hug
e production schedules. They required very large amounts of inputs, including ty
res. They therefore look for large tyre manufacturers such as MRF or Bridgestone
, who can supply them large quantities with any break in supply schedules. Assur
ed Quality Large reputed tyre manufacturers such as MRF and Bridgestone adopt very
tqualityassurancemeasures.OneofthemajorparametersthatOEMsuse todecidetheirtyre
fthetyrestheyproduce.Bridgestone isaclearleaderinthisparameter. Just In Time (
iventhelargeproductionvolumes,automobileOEMsdonotholdinventoriesfor toolong.The
turerswhocansupplythemtyresinrealtime, i.e.asandwhentheneedarises.Thisispos
turers whoincorporateJITmethodsintheirsupplylogistics.
4.2.2
4.2.3
31|P a g e
5. THE
C
ONTEXTTRENDSSHAPINGTHETYREINDUSTRY
Being a raw-material intensive and a derived-demand product, tyre sales are high
ly dependent on external factors that lie outside the purview of the manufacture
rs. A number of raw materials go into the making of a tyre, the prices of which
affect the price of the tyre. Similarly, since tyres complement Automobiles, sal
es figures of Automobile manufacturers have a direct bearing on tyre sales. Thes
e, and many other factors decide the price, quantity and frequency of tyres dema
nded and supplied in the market. 5.1 EconomicEnvironment: 5.1.1 Unresolved Tax iss
ues: The issue of inverted tax structure, where the import duty on natural rubbe
r is as high as 20% but import duty on finished tyres is as low as 10% still rem
ains unaddressed. Other taxation issues have also been denting the competitivene
ss of Indian tyres. 5.1.2 Increasing costs of Raw Materials: The tyre industry i
s highly raw material intensive. Any change in the prices of raw materials affec
ts the profitability of tyre companies. Raw materials primarily comprise of natu
ral rubber, crude and steel based materials which have historically experienced
volatility in prices. In the last few months, price of domestic natural rubber h
as increased by almost 40%. Given the fact that raw materials constitute around
70% of the cost of production, combined with the manufacturers "inability to pas
s on the increased cost to their customers due to intense competition, rise in pr
ices of these materials have had a huge impact on profitability. 5.1.3 Import re
strictions The Indian tyre industry is suffering intense competition from low pr
iced tyres from China and other South East Asian countries. Despite being of a b
etter quality, Indian manufactured tyres loose ground when it comes to pricing.
Moreover, slowing automotive demand from developed countries has made India a lu
crative market for cheap tyres, thus resulting in increased dumping of cheap tyr
es from China. Although the Government has imposed a restraint on the import of
used tyres into India, occasionally there are reports of import of such tyres in
a clandestine manner, sometimes as new tyre at low value, since there is no res
triction on import of new tyres or as tyres under the "others" category.
32|P a g e
5.1.4
Road and support infrastructure
While poor road conditions have a positive impact on replacement demand, by redu
cing the life of the tyre, improved roads can act as a catalyst to increased pur
chase and use of personal vehicles, thus driving up the demand for tyres. Also,
poor road and support infrastructure act as a barrier to radialisation in the co
mmercial vehicle segment.
5.1.5
Sources of Demand: 1) Industrial and freight activity The truck and bus tyre seg
ment accounted for 19% of tyres produced in India in FY2008. Every truck/bus man
ufactured generates a demand for seven tyres. In addition, the price of a truck
tyre is significantly higher than that of a passenger car tyre (roughly 10 times
). Thus the demand multiple emanating from the commercial vehicle segment is hig
hest in value terms. 2) Personal purchasing power As the economy booms and dispo
sable incomes in the hands of the Indian middleclass burgeon, the sale of passen
ger cars has been witnessing an upward swing over the past decade. Since tyre sa
les are directly linked to car sales, both through OEMs and the replacement mark
et, the tyre industry has witnessed a corresponding increase in its sales figure
s. 3) Automobile sales The demand from the OEM segment is a derived one and dire
ctly correlated to the level of automotive production. The recent Slowdown in au
tomotive industry and global economic in general negatively impacted the Indian
tyre industry in 2009. The industry growth was only 2.19% during first nine mont
hs of FY09, compared to 7.38% growth experienced during the same period last yea
r 4) Exports Due to the slowdown in the domestic market brought about by the rec
ession, most India tyre manufacturers have taken to exports to reduce inventory
build-ups. Indian companies have currently entered into sourcing agreements (for
tyres) with neighbouring countries like Sri Lanka and China.
33|P a g e
There is a trend of increasing exports of bus and truck tyres (crossply variety)
from India to developing countries. This is because of the fact that developing
countries are unable to source them from developed countries as these are no mo
re produced there. The product focus of tyre exports from India has been Traditi
onal Truck Tyres. Globally this segment of tyre export is shrinking due to great
er acceptance of radial tyres. Moving towards radialization will be vital if tyr
e producers want to protect their share in international markets.
34|P a g e
5.2 TechnologicalEnvironment: 5.2.1 Indigenous development of radial technology Th

e runaway success of Bridgestone India in the passenger radial car market was ma
inly due to the fact that a decade ago, none of the Indian tyre companies had go
od radial technology know-how. But all that seems to be changing at scorching pa
ce now. Major Indian players such as MRF, JK tyres and Apollo tyres are pumping
in a lot of money in R&D to upgrade their technologies indigenously. MRF has alr
eady succeeded in capturing a market share of 18% in the radial car tyre market.
5.2.2 Market entry by international players The market entry of Bridgestone is
a classic example of what a foreign firms entry can do to the Indian tyre market.
Before Bridgestone entered the Indian market, there was almost no usage of radi
al tyres in India. Besides, customers had to put up with substandard tyres since
in the face of no competition, Indian tyre manufacturers were slow in developin
g their technologies. Al that changed when Bridgestone entered the market. Quali
ty and brand value suddenly became the new buzzwords, and Indian companies final
ly woke up to the huge technological gap between the International and domestic
players. Passenger car OEMs embraced radial technology and the car tyre maeket w
as almost completely radialzed. 5.2.3 Improved Capacity-utilization techniques I
n the face of increasing input prices, and competition from international player
s such as Michellin and Bridgestone, Indian tyre companies are desperately searc
hing for ways to cut costs and improve their production efficiencies. This has r
esulted in adoption of improved capacity-utilization techniques across all major
Indian tyre manufacturers. 5.3 SocioCulturalEnvironment 5.3.1 Explosion in the num
ber of nuclear families As the joint-family system crumbles and the number of nu
clear families explode, more small families seem to be demanding a two/four whee
ler for themselves. This has directly resulted in higher sales of tyres in the p
ast decade. 5.3.2 Higher car density per family The number of upper-class and up
per-middle class families with more than one car per family seems to be increasi
ng exponentially. This is especially true in cities where
35|P a g e
working couples find it difficult to survive without more than one car for trans
portation. With higher disposable incomes, these families are finally able to af
ford this need. 5.3.3 Shifting away from Savings, to EMI culture Another notable
trend that seems to be fuelling car sales (and therefore tryre sales) is the sh
ift in the middle-class consumers saving habits. The Indian middle-class family
has long been known for its savings frenzy. But with a younger workforce, higher
disposable incomes, lower unemployment and the influence of globalization, the
average Indian middle-class family is slowly warming up to the idea of EMI and b
uying on credit. This has helped in furthering the sales of passenger cars signi
ficantly.
36|P a g e
SE EGMEN NTATIO ON,TA ARGETI INGAN NDPOS SITION NING

AN NSTPANA ALYSIS
1. BAS SISFOR
S
EGMEN NTATION NVEHICL LETYPE:
In the ty industry, there is very little direc interaction between th company an
d the cus yre ct n he stomer. Tyre e companies sell mostly to dealers in the rep
lac cement market and to OE EMs. As a res market segmentatio for the tyre indust
ry is based more on the type of vehicle served, rather sult, on e r than on the
individua customer. al
TY YREMAR RKETSE EGMENT TATION
MHCV: Me edium heavy com mmercial vehicle, HCV: Heavy Com mmercial Vehicle LCV:
Light Commercial Vehicle OTR: Off The Road vehicle e, e, R
37|P a g e
2. SELECTINGTHE
T
ARGETSEGMENT:
Once the market has been divided into segments, Tyre manufacturers need to decid
e the segments they are going to service. This requires a deep analysis of each
segment and matching the manufacturers capabilities (finances, core-competency, b
rand image, labor, etc) with the demands of these segment(s).
2.1 Bridgestone:TheMarketSpecializationApproach
Bridgestone India currently concentrates exclusively on the Passenger Car Radial
Tyre segment. Within this segment, it offers a wide range of tyres to suit the
needs of the entire segment of car tyre buyers. Bridgestone is the Market leader
in this segment, with a market share of over 30%. One major reason why Bridgeso
tne has stuck to the Passenger Car segment is because it offers only Radial tyre
s. While the Passenger Car segment is 98% Radialised, other segments in the tyre
industry are yet to
38|P a g e
2.2 MRF:TheCompleteMarketCoverageApproach
MRF holds a diversified portfolio of products that span across the entire tyre m
arket. It manufactures tyres for all segments of the tyre market including Passe
nger Vehicles, Commercial Vehicles, Farm Vehicles ad Off-The-Road and Industrial
Vehicles. This complete market coverage of its products has made MRF the undisp
uted leader in the overall Indian tyre industry.
3. DIFFERENTIATIONAND
P
OSITIONINGSTRATEGIES:
Being a homogenous product, there is not much difference in products offered by
competing tyre manufacturers. However, companies do try to differentiate themsel
ves by outdoing one another in some Points of Parity, such as quality, safety, t
read design, economy, etc.
3.1 EstablishingCategoryMembership Category Membership refers to the set of product
s that a brand competes with. It defines the market that the brand is in. 3.1.1
Bridgestone High Performance with Value for Money Bridgestone communicates its c
ategory membership as a top quality, high performance tyre, with an internationa
l pedigree. In order to ride home this message, it has associated itself with F1
racing events and widely publicizes its success on the F1 racetrack.
39|P a g e
Customers have come to associate Bridgestone tyres with the exacting performance
standards required in F1 racing. 3.1.2 MRF Tyres with Muscle The MRF mascot, th
e MRF muscleman, clearly states the category membership MRF subscribes to. MRF c
ommunicates to the customer its superior endurance and strength. The company spo
nsors a number of sports such as cricket and rally racing, to position its tyres
as high endurance and sporty. Its slogan Tyres we race, are the tyres you buy sta
nds testimony to their category membership. 3.2 PointsofParity(POP): POP refers to a
ssociations that are not necessarily unique to the brand, but may in fact be sha
red by other brands. For a product to achieve POP on a particular attribute, a s
ufficient number of customers must think that the brand is good enough on that dim
ension. Put simply, POPs are the minimum parameters a product must possess to be
considered a good enough to compete within its membership category.
Some important parameters that consumers look for, in every tyre brand, and whic
h therefore form the basis of POP in the tyre industry are: 1) Quality: Material
quality of the tyre must be very good. 2) Safety: The tyre must meet national/i
nternational safety standards under high stress conditions. 3) Durability: The t
yre must survive wear and tear for a decent period of life. 4) Mileage: The tyre
must offer improved mileage (especially true for Radial tyres). 5) Grip: The ty
re grips the road firmly under all weather conditions. 6) Cornering and braking:
The tyre must perform well while cutting corners and braking at high speeds. 7)
Ride comfort: The tyre must offer a smooth and quite riding experience.
40|P a g e
3.3 PointsofDifference(POD):
PODs attributes that consumers strongly associate with a brand, positively evalu
ate it, and believe that they could not find it to the same extent in other comp
eting brands. Simply put, PODs are those attributes that make a product stand ou
t from the competition. It is the winning proposition. Though tyres are a highly
homogenous products, and differentiation is very difficult, tyre manufacturers
have come up with innovative ways to demonstrate their superiority in certain pa
rameters such as quality, endurance, value for money, and additional services.
3.3.1
Bridgestone Quality and Value for Money Bridgestone prides itself for manufactur
ing some of the highest quality tyres on the globe. Customers perceive the brand
to be associated with F1 quality and performance. 1) Value for Money: Bridgesto
ne customers perceive their tyres as a good buy, despite their premium pricing.
This is because Bridgestone is known for high quality, long lasting tyres that g
ive the customers value for their money in the long run. 2) Perfectly balanced w
heels: Another major benefit that customers associate with Bridgestone tyres is
the perfectly balanced tyres that they get fitted on purchase. Bridgestone makes
this possible by making it mandatory that its dealers possess computerized whee
l balancing equipment. Every customer who walks out of a dealer store with a Bri
dgestone tyre is thus assured of an additional service: perfectly balanced wheel
s. 3) International quality and high performance: Most Bridgestone customers are
aware of the international quality and the impeccable pedigree that Bridgestone
enjoys worldwide. International Quality and high performance are the major reas
ons why most automobile OEMs prefer to partner with Bridgestone.
3.3.2
MRF High endurance tyres MRF has for log concentrated on the high performance it
s tyres offer in trying conditions. To further this image, it has partnered with
many sports events and created a mascot that reflects the toughness it claims i
n it tyres: the MRF muscleman.
41|P a g e
1) High endurance tyres: Tyre consumers, especially heavy truck and bus owners,
consider MRF tyres to be one the toughest in the market. This explains why MRF i
s amongst the top market leaders and in the heavy commercial vehicles category (
second only to Apollo tyres). 2) High performance tyres: MRF is the clear leader
in the Two Wheeler tyre market. This is because of its image as a high enduranc
e and high performance tyre, in the minds of Two Wheeler owners. Brand recogniti
on and recall has also played an important role in its emergence as the market l
eader. 3.4 Valueproposition: Value propositions are a set of benefits that compani
es offer to satisfy customer needs. It answers the customers question, what is in
it for me? 3.4.1 Bridgestone Quality and Value for money: Bridgestones main value
proposition is its international quality and value for money. Every Bridgestone
customer is assured of a tyre that is of international standards and will give h
im trouble-free service for a long time, thus giving him value for his money. 3.
4.2 MRF Endurance guaranteed: MRF prides itself in making tyres that go into som
e of the most trying conditions on Indian roads: onto Heavy Vehicles on rough In
dian roads. Consequently, MRF offers a compelling value proposition to heavy veh
icle owners as well as passenger car and two wheeler owners: Quality tyres that
endure in the worst of conditions. It drives home this macho message through its
mascot, the MRF muscleman. 3.5 Positioningstatements: 3.5.1 Bridgestone - passion
for excellence:
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3.5.2

MRF Tyres with muscle:

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ANALYZINGTHEMARKETINGMIX
THE4PANALYSIS

1. THE
P
RODUCT:
The basic definition of a product is anything that can be offered to a market to
satisfy a want or need. Tyre companies in India have been fulfilling this need
for over half a century now, through tyres that endure on rough Indian roads. Th
e entry of Multinationals like Bridgestone and Goodyear has added two more flavo
rs to this mix: Quality and ride comfort. Today, Indian tyre manufacturers are r
acing against each other to introduce tyres that assure impeccable quality, endu
rance and ride comfort.
1.1 ProductlevelsThecustomervaluehierarchy: While devising market offerings, markete

address five product levels:
COREBENEFIT BasicProduct ExpectedProduct Augmented Product PotentialProduct
44|P a g e
1.1.1
Core Benefit: This is the service or benefit the customer is customer is really
buying. In the tyre industry, the core benefit that a customer is looking for is
a tyre that his vehicle can run on.
1.1.2
The Basic product: The basic product that all tyre manufacturers offer, is a tyr
e that fits the customers vehicle
1.1.3
The Expected product: The expected product defines the basic features that a buy
er assumes in the product offering. In a way, this is the POP for the product in
its membership category. In the tyre industry, the basic product would be a tyr
e that meets the following criteria: 1) Quality:Material quality of the tyre must
be very good. 2) Safety:The tyre must meet national/international safety standards
under high stress conditions. 3) Durability:The tyre must survive wear and tear f
or a decent period of life. 4) Mileage:The tyre must offer improved mileage (espec
ially true for Radial tyres). 5) Grip:The tyre grips the road firmly under all wea
ther conditions. 6) Corneringandbraking:The tyre must perform well while cutting co
rners and braking at high speeds. 7) Ridecomfort:The tyre must offer a smooth and
quite riding experience.
1.1.4
The Augmented product: Augmented products exceed customer expectations. They off
er a value proposition that the customer may not have thought about, or was not
expecting. The Augmented product stage is where the competition begins in the ty
re industry. This is where tyre manufacturers try to differentiate themselves fr
om the competition
45|P a g e
1) Bridgestone: Quality, Comfort, Value for Money Bridgestone differentiates its

elf from the competition, by offering tyres that exceed the customers quality req
uirements, ride comfort and value for money. Bridgestone ensures that its tires
meet international quality standards, last much longer (thus giving more value f
or money), and performs smoothly and quietly (ride comfort). These are the three
pillars that Bridgestone differentiates itself on. 2) MRF: Quality, Endurance M
RF differentiates itself from the competition, on its two pillars of Quality and
high endurance. Given the fact that a major portion of its sales come from Heav
y truck and bus categories, it stresses on the durability of its tyres on rough
Indian roads.
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2. THE
P
LACE:
Once the product has been decided upon and the
e product positioned, it is time to decide how
r the value (product) to the customer. This is
hat make the product available for consumption
market segmented, targeted and th

and where the marketer can delive
done through marketing channels t
to the customer.
2.1 Push and Pull strategies in channel marketing: In a Push strategy, the manufa
cturer uses his sales force, trade promotion, money or other means to induce int
ermediaries to carry promote and sell its products to end users. Ina Pull strate
gy, the manufacturer uses advertising, promotion and other forms of communicatio
n to persuade the customer to demand the product from intermediaries, thus induc
ing the intermediaries to order it. 1) Bridgestone: Pursuing a Push strategy Bri
dgestone pursues a strong push strategy in its channel marketing. The advertisin
g layout for Bridgestone India is minimal. Bridgestone spends very little on adv
ertising and promotion. Instead, they concentrate on incentivizing the dealer to
stock, promote and sell their products. As a result, Bridgestone regularly intr
oduces sell-in schemes (promotional schemes for dealers), gold vouchers, interna
tional holiday vouchers, OE camps, etc. 2) MRF: Masters at Pull strategy MRF fol
lows exactly the opposite strategy. MRF has mastered the art of Pull strategy. I
t pioneered the practice of heavy advertising and promotion in the tyre industry
. So much so, that today, MRF commands top-of-mind recall and top brand recognit
ion amongst all tyre manufacturers in India. There is hardly any tyre customer w
ho hasnt heard of the MRF brand. MRF achieved this remarkable feat by adopting a
multi-pronged marketing strategy that involved endorsements by sports celebritie
s like Sachin Tendulkar, Brian Lara and Steve Waugh, promoting popular sports li
ke cricket and car rally races, and even introducing its own mascot: the MRF mus
cleman, that reflected the tough image it projected for its tyres. While MRF has
pulled out all stops in advertising and promoting its products, it gives very l
ittle attention to incentivizing its channel partners. This is clear from the ve
ry low margins it offers its dealers and the complete absence of other dealer in
centives. Yet, dealers look forward to stock MRF tyres because customers demand
it.
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2.2 ChannelDesign: To decide on the channel design, the marketer must first scan th
e target customer base. Different types of customer segments may require differe
nt types of channels. The following figure shows the break-up of car tyre sales
according to customer segments: As the figure shows, there are three main custom
er segments in the car tyre market: 1) Original Equipment Manufacturers (OEMs) 2
) The Replacement Market (replacement of old, worn out or defective tyres) 3) Ex
ports
2.2.1
Direct and Indirect channels: 1) Direct channels: Direct channels consist of a m
arketer selling directly to the final customer. Of the three types of customer s
egments in the Passenger Car Tyre market, two customer segments call for a direc
t channel: a) OEMs : Given the huge quantities required and the Just In Time log
istics employed, OEMs source their tyre supplies directly from manufacturers. Ty
re manufacturers therefore most set up exclusive distribution channels to servic
e these OEMs. b) Exports: To minimize logistical complexities and supply delays,
Tyre exports are handled directly by the manufacturers. Tyre manufacturers set
up direct distribution channels that supply tires directly to export destination
s Note: tyre manufacturers sometimes employ Carry & Forward agents to transport
their tyres from the factory to OEM sites or export destinations. However this v
aries from company to company.
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2) Indirect channels: Indirect channels consist of one or more intermediaries be

tween the manufacturer and the final customer. The Replacement market segment of
the tyre industry caters to individual customers. It therefore requires wide re
ach and deep market penetration. The distribution channel for replacement market
comprises of the manufacturer, warehouses/ C&F (carry & forward) agents, and th
e dealers. The Tyre is finally sold to the customer by the dealer.
INDIRECT CHANNEL (FOR THE TYRE REPLACEMENT SEGMENT)
Manufacturer
Warehouse/ C & F agent
Dealer
Consumer
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2.2.2
Single and multiple channels:
Most organizations today employ multichannel marketing i.e. selling to different
consumer segments through different channels. The tyre industry too follows thi
s method. There are three different channels dedicated to handle the three diffe
rent kinds of consumers:
Customer OEMs Exports Replacement Channeltype Direct Direct Indirect
2.2.3
Channel length: Channel length refers to the number of channel intermediaries be
tween the manufacturer and the end user. In the tyre industry, based on the targ
et customer, the channel length differs as follows:
Customer OEMs Exports Replacement Channellength 0(Direct) 0(Direct) 2level

2.3 ChannelManagementpractices: Once the manufacturer has selected a channel system
, it must select, train, motivate and evaluate the individual intermediaries for
each channel. This is a multi step process. 2.3.1 Selecting channel members: 1)
Bridgestone: Bridgestone selects channel partners after a careful evaluation an
d analysis. Bridgestone selects dealers based on the following criteria: a) Cred
it history: The dealer should have a clean credit history with a good repayment
record. b) Experience: The dealer should have relevant experience of a few years
in the field of stocking and selling tyres.
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c) Exclusive dealers Vs Multi-brand Dealers: Though Bridgestone sells its tyres

through both exclusive and multi-brand dealers, it gives very little attention t
o building exclusive dealer strength. Instead, it only requires that Multi-brand
dealers offer Bridgestone an 80% share in stocking space. d) Mandatory Tyre cha
nging equipment: One major dealer criterion that is exclusive to Bridgestone is
its insistence that all dealers must possess automatic tyre changing and wheel b
alancing equipments. This severely restricts the number of dealers who can apply
for Bridgestones dealership. But it also increases the overall buying experience
of a Bridgestone customer. 2) MRF: a) Credit history: The dealer should have a
clean credit history with a good repayment record. b) Experience: The dealer sho
uld have relevant experience of a few years in the field of stocking and selling
tyres. c) Exclusive dealers Vs Multi-brand Dealers: Though MRF also sells its t
yres through both exclusive and multi-brand dealers, it gives a lot of attention
to setting exclusive showrooms for its tyres. It also mandates a very high stoc
king share from multi-brand dealers.
2.3.2
Training and motivating channel members: 1) Training and motivation: Both Bridge
stone and MRF undertake regular dealer trainings for their exclusive dealers. Th
ese trainings include modules that teach the dealers how to identify customer ne
eds and respond to them. While Bridgestone regularly introduces dealer schemes,
holiday packages, gold vouchers, etc to motivate its dealers, MRF focuses exclus
ively on brand promotion at the customer level. 2) Channel Power: Channel power
refers to the kind of power Manufacturers hold over channel partners. It is the
ability of the manufacturer to alter the behavior of a channel member.
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Bridgestone follows reward power with its dealers. The company offers additional
incentives such as discounts, free gifts, gold vouchers, holiday trips, etc and
encourages them to stock, promote and sell their tyres. MRF on the other hand,
pays very little attention to channel power. They focus exclusively on a Pull st
rategy by heavily advertising its products and capturing topof-mind recall and b
rand recognition amongst customers. This automatically results in demand for its
tyres from customers, which in turn incentivizes the dealer to stock MRF tyres.
In that way, we can say that MRF influences referent power over its dealers. De
alers like to be associated with MRF because it is the most sought after brand b
y consumers. 2.3.3 Efficient Consumer Response (ECR) practices: Many companies,
including Bridgestone, have adopted ECR practices to streamline their supply cha
in and logistics and also to cut overhead costs. ECR requires close coordination
between the manufacturer and the dealer in three areas: 1) Demand Side manageme
nt: Demand side management deals with collaborative practices between the manufa
cturer and its dealers to stimulate consumer demand by joint marketing and sales
activities. As a part of these activities, Bridgestone offers free sops to cust
omers through its dealer outlets such as: a) b) c) d) Free Provogue T-shirts Fre
e tyre and battery check-ups every 4-6 months for Bridgestone customers 50% disc
ount on alignment and balancing Free F1 racing trip tickets
All these are done at the dealer store, where the customer interaction happens.
Therefore the dealers cooperation is crucial. 2) Supply Side management: Supply S
ide Management deals with collaborative practices between manufacturer and its d
ealers to optimize supply. Both Bridgestone and MRF practice joint logistics and
Supply Chain Management methods to ensure adequate stocking of its tyres at dea
ler outlets. The manufacturers do this by closely working with dealers to track
their shelf spaces and replenish stocks on time.
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3) Enablers and Integrators:
Enabler and integrators are collaborative IT and process improvement tools to su
pport joint activities that reduce operational problems and allow greater standa
rdization. Though Bridgestone uses IT based SCM tools to track its inventory int
ernationally, it is yet to introduce these practices in its Indian operations. I
n fact in 2005, Satyam was chosen to implement IT solutions for Bridgestone, at
its headquarters in Japan. This included consulting, implementation and operatio
ns for SAP and Siebel CRM, Cognos business intelligence and content management.
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3.
P
RICINGSTRATEGIES:
Pricing a product is a function of many factors. A number of factors affect the

pricing of a product directly. Some among them are brand value, competition, inp
ut costs, quality, government policies, macroeconomic developments, etc. 3.1 Basi
cpricingstrategiesinthetyreindustry: The tyre market is not very price sensitive. Co
mers are more concerned about the tyres functionality, than its price. Besides,
being a homogenous product, most tyre companies price their tyres at more or les
s the same levels. International players such as Bridgestone price their tyres s
lightly higher than the rest of the market. This is partially to demonstrate its
superior quality and pedigree. Bridgestone and MRF: Price leaders Bridgestone a
nd MRF have long been leaders in the Passenger Car tyre segment. By virtue of th
eir market share, they have traditionally been price makers. The rest of the tyr
e industry has followed the pricing cues set by these leaders. Bridgestone- Usin
g Price-Quality inference to its advantage: Many consumers use price as an indic
ator of quality. Bridgestone understands this subtle connection very well. Being
world leaders in quality and reliability, Bridgestone actively tries to remind
the superior quality factor to its customers by pricing its tyres a little highe
r than the competition. Consumers are ready to pay this price because they perce
ive Bridgestone tyres to be value-for-money. The high prices in turn reaffirm th
e perception of quality product in the consumers mind. Thus, higher prices induce
a continuous cycle of quality reaffirmation. Bridgestone: Low Total Cost of own
ership Another reason why Bridgestone is able to price its products higher is th
e value-for-money that consumers associate with it. Bridgestone tyres last longe
r and perform better over the long run. Thus the Total cost of ownership over th
e long term is very low. There is hardly any maintenance, repair or replacement
cost for a long time after purchase. Bridgestone and MRF- using the Markup prici
ng method The tyre industry being a very raw material intensive industry, the in
put costs mainly decides the price of tyres. In fact, 90% of a tyres cost compri
ses of its raw material costs. Markup pricing is the common pricing method follo
wed across the tyre industry. This involves adding a standard markup to the tyres
production cost.
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3.2 Dealerdiscountsandallowances: While MRF (in keeping with its Pull strategy of co
ncentrating on end consumers), does not indulge the dealer with too many discoun
ts and allowances, Bridgestone has mastered the art of incentivizing the dealers
with heavy discounts and allowances. Some of the dealer discount schemes used b
y Bridgestone include: 1) Credit discounts for quick credit repayments 2) Quanti
ty discounts on large volumes (based on discount slabs) 3) Seasonal discounts in
the form of sell-in schemes for the dealers during festivals.
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4. PRODUCT
P
ROMOTION:
Marketing communications help a firm to inform, persuade and remind customers ab
out its products, directly or indirectly. While Bridgestone India has traditiona
lly followed a subdued promotion strategy to let its tyres reputation for quality
do the talking, MRF has gone all out to woo the consumer to its tyres. MRF cont
inually looks to improve its Brand Equity by maximum mediums of brand contact (c
onsumers exposure to the brand name). Today, MRF command top-of-mind recall excel
lent brand recognition in all categories of vehicles in the tyre market. 4.1 TheM
arketingCommunicationmix: Communication mix refers to the major mediums that compan
ies use to promote their products. There are eight major modes of market communi
cation: Advertising, Sales Promotion, Events and Experiences, Public Relations,
Direct Marketing, Word-of-Mouth marketing, and Personal selling.
1) MRF: Gods of Advertising MRF uses advertising as the primary medium to reach
out to its customers. The company invests heavily on print, TV and outdoor media
, to drive its brand into the minds of the customer. MRF is credit with devising
some of the most creative ads ever made for an Indian tyre company. It allots a
huge budget outlay for advertisements and other promotional activities. Its mas
cot, the MRF muscleman along with its slogan Tyres with muscle was once one of the
most recognizable advertising campaign in Indian advertising history. It was sp
ecially devised at Lintas by its CEO, Alyque Padamsee himself. Allyque and his t
eam painstakingly surveyed scores of truck drivers at road side dhabas to unders
tand their needs and wants. MRF takes care to promote its tyres as tough, reliab
le and high endurance. This is because its main share of customers comes from th
e Light and Heavy Commercial Vehicles segment. Truck and bus owners in this segm
ent consider strength and endurance as the No.1 factor desirable in a tyre. For
the passenger and two-wheeler segment, MRF promotes itself as a high quality and
high performance tyre manufacturer. 2) Bridgestone: Driving Sales Promotions th
rough its dealers Sales promotions are used more by Bridgestone than MRF. Bridge
stone regularly introduces festival offers, consumer discounts and other sops th
rough its dealer outlets. These offers to customers are called sell out schemes.
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Some recent offers and incentives that Bridgestone has provided its potential cu
stomers include: a) Free Provogue T-shirts worth Rs. 1,200/- for every car tyre
purchase b) Free tyre and battery check-ups every 4-6 months exclusively for Bri
dgestone customers c) 50% discount on alignment and balancing exclusively for Br
idgestone customers d) Free F1 racing trip tickets through lucky draw Bridgeston
e constantly works with its dealers, to give its customers a unique experience w
hile shopping for its tyres. As a part of achieving this enhanced experience, Br
idgestone has made it mandatory that only dealers with automatic wheel alignment
and balancing equipment can apply for its tyre dealerships. This ensures that w
hen customers buy a Bridgestone tyre, they also get an added benefit of perfectl
y aligned wheel fitting.
3) MRF: spin doctors of publicity campaigns Over the years, MRF has perfected th
e art of publicizing its brand through highly visible events and celebrity endor
sements. MRF has consciously aligned itself with a number of sporting events in
India. Its most memorable association with sports and celebrity endorsements was
the MRF label that adorned Sachin Tendulkars bat for many years. MRF is also wel
l known for founding the MRF Pace Foundation, which is today one of the premier
training institute for Indias budding pace bowlers. Though cricket, given its cul
t like status, gave MRF a lot of publicity, it was its sponsorship of auto-racin
g projected its slogan, Tyres with Muscle and outlined the quality of its tyres an
d allied products .
4) Bridgestone: Riding the wave of Word-of-Mouth marketing The biggest asset in
Bridgestones marketing arsenal is the goodwill it has created for itself amongst
its thousands of satisfied customers and OEMs. Bridgestone tyres are known for t
heir international quality, ride comfort and durability. OEMs prefer Bridgestone
over other manufacturers for its reliability and quality. Similarly, Bridgstone
57|P a g e
customers have had little reason for complaining about their tyre and have alway
s perceived it to b a value for money buy. This trust and user satisfaction seem
s to have generated a large following of customers who strongly recommend Bridge
stone tyres. Most new Bridgestone customers purchase the tyre because their clos
e relatives, mechanics, or friends recommended it. 5) Bridgestone: Banking on Be
low-The-Line (BTL) promotional activities Below The Line" promotion refers to for
ms of communication that do not include the media. Below the line sales promotio
ns are short-term incentives, largely aimed at consumers. Put simply, BTL promot
ions are a very good way to achieve communication objectives more efficiently wh
en the budget is limited. BTL is especially suitable for products whose target g
roups are limited and specific. Bridgestone uses BTL in a big way. It indulges i
n sales promotion activities such as encouraging dealers to promotion their tyre
s, and regularly introduces festival offers, consumer discounts and other sops t
hrough its dealer outlets. These offers to customers are called sell out schemes
. Some recent offers and incentives that Bridgestone has provided its potential
customers include: a) Free Provogue T-shirts worth Rs. 1,200/- for every car tyr
e purchase b) Free tyre and battery check-ups every 4-6 months exclusively for B
ridgestone customers c) 50% discount on alignment and balancing exclusively for
Bridgestone customers d) Free F1 racing trip tickets through lucky draw
6) MRF: Banking on Above-The-Line (ATL) promotional activities
Above-The-Line is a type of advertising that uses the media to promote a brand.
This type of communication is conventional and impersonal in nature. MRF invests
heavily on print, TV and outdoor media, to drive its brand into the minds of th
e customer. MRF is credited with devising some of the most creative ads ever mad
e for an Indian tyre company. It allots a huge budget outlay for advertisements
and other promotional activities. Its mascot, the MRF muscleman along with its s
logan Tyres with muscle was once one of the most recognizable advertising campaign
s in Indian advertising history.
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4.2 :DevelopingEffectivecommunications 4.2.1 Identifyingthetargetaudience: The fi

p to designing an effective communication strategy is identifying the target aud
ience. As the figure below shows, there are three main customer segments in the
car tyre market: a. Original Equipment Manufacturers (OEMs) b. The Replacement M
arket (replacement of old, worn out or defective tyres) c. Exports
For each of these segments a appropriate communication strategy needs to be deve

loped. 4.2.2 DeterminingtheCommunicationObjectives There are four possible communic
tion objectives for a company: a. Category Need: Establishing a product or servi
ce as belonging to a particular category of products. Especially used for new-to
-the-world products. b. Brand Awareness: Building brand recognition and Brand Re
call through promotional activities. Brand Awareness forms the foundation for bu
ilding Brand Equity. c. Brand Attitude: Evaluating a brand with respect to its p
erceived ability to meet a relevant need.
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d. Brand Purchase Intention: Self-instructions to purchase a brand or to take pu

rchase related action. 1) MRFcreatingBrandAwareness: MRF has mastered the art of c
ting lasting impressions in the mind of the consumer. It pioneered the practice
of heavy advertising and promotion in the tyre industry. So much so, that today,
MRF commands top-of-mind recall and top brand recognition amongst all tyre manu
facturers in India. There is hardly any tyre customer who hasnt heard of the MRF
brand. MRF achieved this remarkable feat by adopting a multi-pronged marketing s
trategy that involved endorsements by sports celebrities like Sachin Tendulkar,
Brian Lara and Steve Waugh, promoting popular sports like cricket and car rally
races, and even introducing its own mascot: the MRF muscleman, that reflected th
e tough image it projected for its tyres. Today, dealers look forward to stock M
RF tyres because customers demand it. 2) BridgestoneshapingPurchaseIntentionthroughSe
loutschemes Sell out schemes refer to the promotional offers and discounts that co
mpanies offer to positively impact the buyers purchase decision. Bridgestone, in
collaboration with its dealers, offers a variety of discounts, special deals and
compliments to influence the customer into buying its tyres. Some recent offers
and incentives that Bridgestone has provided its potential customers include: a
) Free Provogue T-shirts worth Rs. 1,200/- for every car tyre purchase b) Free t
yre and battery check-ups every 4-6 months exclusively for Bridgestone customers
c) 50% discount on alignment and balancing exclusively for Bridgestone customer
s d) Free F1 racing trip tickets through lucky draw 4.2.3 Designingthecommunicatio
n To design a communication strategy that achieves the desired response, the mark
eter needs to solve three problems: what to say? (message strategy), How to say
it? (creative strategy) and who should say it? (message source)
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Since Bridgestone India does not advertise its tyres much but instead depend on
Push strategies at the dealer level and reputation at the OEM level to gain sale
s, let us instead look at how MRF has designed its communication strtategy. MRFUsin
gSportsandMuscleasMessageStrategies The MRF mascot, the MRF muscleman, clearly states
he category membership MRF subscribes to. MRF communicates to the customer its s
uperior endurance and strength through its advertisments. The company sponsors a
number of sports such as cricket and rally racing, to position its tyres as hig
h endurance and sporty. Its slogan, Tyres we race are the tyres you buy stands tes
timony to their category membership. MRF takes care to promote its tyres as toug
h, reliable and high endurance. This is because its main share of customers come
s from the Light and Heavy Commercial Vehicles segment. Truck and bus owners in
this segment consider strength and endurance as the No.1 factor desirable in a t
yre. MRFImplementingCreativeStrategythroughinformationalappeal The creative strate
to say it?) for a communication channel can be realized through Informational A
ppeals. Informational Appeals elaborate on a products attributes and benefits. MR
F communicates its brand value to the customer by emphasizing on the toughness a
nd durability of its tyres. The benefit it offers the consumer is increased endu
rance and performance under the most testing condition. MRFUsingcelebritiesasMessage
ces MRF has mastered the art of effectively using sports celebrities to endorse i
ts products. The list of celebrities who have endorsed the MRF brand is formidab
le. The list includes sporting greats such as Sachi Tendulkar, Brian Lara, Steve
Waugh and Gautam Gambhir. One of the most enduring images of MRF brand is the M
RF logo that adorned Sachin Tendulkars bat over a decade.
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MARKETFEEDBACKANDCONTROLMECHANISMS
APRIMARYDATAANALYSIS
As a part of our primary data exercise, we visited 10 tyre dealers in Coimbatore

who stocked MRF and Bridgestone brand of tyres. We prepared a closed-ended ques
tionnaire for them and took their feedback on various parameters involving the t
yres they sell. The results provided us with a deep insight into a typical deale
rs mind.
A Marketing Survey of Tyre Dealers (2009-2010) Questionnaire
1. Details of the firm and proprietor. Name and Address of the Firm/Branch Name
of the Proprietor/Partner
2. Facilities available in your shop.
Wheel Alignment Wheel Balancing Tyre Changing Nitrogen Gas Alloys Others
3. Dealer For
MRF Apollo Ceat JK Bridgestone Birla Goodyear Michelin Others
4. Which Brand is more profitable?
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5. Best selling pattern and size.

MRF Apollo Ceat JK Tyres Bridgestone Birla Tyres Goodyear Michelin Others
6. Which brand is more preferred by customers?
7. Price of different brand products?
High Moderate Low
8. Which company is providing better after sales service?
9. Which companies sell out scheme is more effective?
10. Which companies sell out scheme is effectively reached to customers?
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1. Dealer For
DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y
Apollo
Ceat Y
JK
GDY
BS
Michelin
Birla Y
Others
Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Brands
MRF Apollo Ceat JK Goodyear
Total
6 6 4 4 3 3 1 5 5 1 3 3 4 5
Dealerfor
MRF Apollo Ceat JK
6
6
Goodyear Bridgestone
4 4
Michelin Birla Others
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2. Which brand is more profitable?

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y
Apollo
Ceat
JK
GDY Y
BS
Michelin
Birla
Others
Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Y
Y
Y
Brands MRF Apollo Ceat JK Goodyear
Total 6 3 1 2 4 2 0 1 2 21
Percentage 28.57% 14.28% 4.76% 9.52% 19.04% 9.52% 0.00% 4.76% 9.52% 100%
4 0 1 2
Whichbrandismost profitable?
MRF Apollo 2 6 Ceat JK Goodyear Bridgestone 3 2 1 Michelin Birla Others
65|P a g e
3. Which Brand is more preferred by customers?

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y
Apollo
Ceat
JK
GDY
BS Y
Michelin
Birla
Others
Y Y Y Y Y Y Y Y Y Y Y Y
Y
Y Y Y Y Y Y Y Y Y
Brands MRF Apollo Ceat JK Goodyear
Total 6 3 1 2 1 7 1 1 2 24
Percentage 25% 12.5% 4.16% 8.33% 4.16% 29.16% 4.16% 4.16% 8.33% 10
Whichbrandismost preferredby customers?
1 1
MRF
2 6
Apollo
7 1 2 3 1
Ceat JK Goodyear
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4. Price of different brand products

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF L M
Apollo H M
Ceat L M M
JK M M M L M
GDY M M L M
BS M H H M H
Michelin H H H H
Birla M L
Others L L L M L L
M L M
M M
M L M
M
Brands MRF Apollo Ceat JK Goodyear Bridgestone Michelin Birla Others
High 1 3 4
Moderate 5 4 2 4 3 2 1 1
Low 3 1 1 1 1 5
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HighPriced
1
Apollo 4 3 Bridgestone Michelin
ModeratelyPriced
MRF 1 1 2 3 4 4 2 5 Apollo Ceat JK Goodyear Bridgestone Michelin Birla
LowPriced
MRF 3 5 1 1 1 1 Apollo Ceat JK Goodyear Bridgestone Michelin
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5. Which company provides better after sales service?

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y Y Y Y
Apollo Y Y Y
Ceat
JK Y
GDY Y Y
BS Y Y Y Y
Michelin Y Y
Birla Y
Others Y Y
Y
Y
Brands
Total 4 3 1 2 2 4 2 1 2 21
Percentage 19.05% 14.28% 4.76% 9.52% 9.52% 19.05% 9.52% 4.76% 9.52
Whichcompanyprovidesbetterafter salesservice?
1 2 3 4 2 2 1
MRF Apollo Ceat JK Goodyear

MRF
2 4
Apollo Ceat JK Goodyear Bridgestone
1.
Which companys sell out scheme is most effective?

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y Y Y Y
Apollo Y Y Y
Ceat
JK Y
GDY Y Y
BS Y Y Y Y Y Y
Michelin Y
Birla
Others Y
Y Y
Y Y Y
Brands MRF 4 3 2 4 2 6 1 0 1 23
Total
Percentage 17.39% 13.04% 8.69% 17.39% 8.69% 26.08% 4.34% 0.00% 4.34
Whichcompany s selloutschemesare moreeffective?
1 6 4 01 4 3 2 Apollo Ceat MRF
Apollo Ceat JK Goodyear Bridgestone

2
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Which companys sell out schemes effectively reach the customer?

DealerNumber 1 2 3 4 5 6 7 8 9 10
MRF Y Y Y Y Y
Apollo Y Y Y
Ceat Y
JK Y Y Y
GDY Y
BS Y Y Y Y Y Y Y
Michelin
Birla
Others Y
Brands
Total Percentage 5 3 1 3 23.81% 14.28% 4.76% 14.28% 4.76% 33.33%

Whichcompany ssellout schemeseffectivley reachthecustomer?
001 5 7 3 3 1 1 Ceat Apollo MRF
MRF Apollo Ceat JK
Goodyear 1 Bridgestone Michelin Birla

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Best selling pattern and size. Name MRF Tyres Pattern

All passenger car segments. ZCL ZUL ZUTS ZCT All T & B tyre models. 175/80 R13 1
45/70 R12 145/80 R12 235/75 R15 165/65 R13 175/70 R13 900/20 1000/20 1100/20 145
/70 R12 145/80 R12 165/65 R13 900/20 1000/20 1100/20
Size
Apollo Tyres
Amezer XL Aspire Sigma Steel (All Models) Amargold (T&B) All T & B tyre models.
Ceat Tyres
All truck & bus tyre.
900/20 1000/20 1100/20 145/70 R12 145/80 R12 165/65 R13 165/60 R13 235/70 R16 15
5/65 R13
JK Tyres
All rally models. JK Ultima-XP Elanzo Crusero Ultima-NXT Brute Tornado
Goodyear
Maruti (All Models) G28 GPS2 T & B Models
Bridgestone
S322 & B350 S248 S322 & B250 B390 All passenger car segments.
145/70 R12 145/80 R12 165/65 R13 195/70 R14 175/70 R14 155/70 R13 900/20 1000/20
1100/20 145/70 R12 145/80 R12 145/70 R13 155/65 R13 205/80 R13 155/80 R14 165/8
0 R14 175/75 R12 195/70 R12 235/70 R16 155/80 R13
Michelin Tyres
XM (Models) Energy En XM LTX A/T
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Birla Tyres Other Tyres

MXTE All T & B tyre models.
Nexen SB802 92H N5000 SB652 N7000 CP661 Falken
165/65 R13 900/20 1000/20 1100/20 255/70/16 165/65 R13 155/70 R13 145/80 R12 P20
5/65 R15 175/70 R12 145/80 R13 235/70 R16
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CHAPTER3

MARKETINGSTRATEGIES:
ARELATIVEANALYSIS

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ANALYZINGTHEMARKETSTRATEGIES
ARELATIVEANALYSIS

1. ANALYSISOFTHEOVERALLMARKETINGSTRATEGIES:
1.1 Marketing Strategy Analysis 1) Bridgestone: Pursuing a Push strategy, reputat
ion, and BTL (Below the line ) promotion strategies Bridgestone pursues a strong
push strategy in its channel marketing. The advertising layout for Bridgestone
India is minimal. Bridgestone spends very little on advertising and promotion. I
nstead, they concentrate on incentivizing the dealer to stock, promote and sell
their products. As a result, Bridgestone regularly introduces sell-in schemes (p
romotional schemes for dealers), gold vouchers, international holiday vouchers,
OE camps, etc. Bridgestone uses BTL promotional activities in a big way. It indu
lges in sales promotion activities such as encouraging dealers to promotion thei
r tyres, and regularly introduces festival offers, consumer discounts and other
sops through its dealer outlets. These offers to customers are called sell out s
chemes. Some recent offers and incentives that Bridgestone has provided its pote
ntial customers include: a) Free Provogue T-shirts worth Rs. 1,200/- for every c
ar tyre purchase b) Free tyre and battery check-ups every 4-6 months exclusively
for Bridgestone customers c) 50% discount on alignment and balancing exclusivel
y for Bridgestone customers d) Free F1 racing trip tickets through lucky draw Th
e biggest asset in Bridgestones marketing arsenal is the goodwill it has created
for itself amongst its thousands of satisfied customers and OEMs. Bridgestone ty
res are known for their international quality, ride comfort and durability. OEMs
prefer Bridgestone over other manufacturers for its reliability and quality. Si
milarly, Bridgestone customers have had little reason for complaining about thei
r tyre and have always perceived it to b a value for money buy. This trust and u
ser satisfaction seems to have generated a large following of customers who stro
ngly recommend Bridgestone tyres. Most new Bridgestone customers purchase the ty
re because their close relatives, mechanics, or friends recommended it.
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Analysis: Though Bridgestone has succeeded in almost completely wooing the OEM m
arket with its focus on quality, reliability and international pedigree, the Rep
lacement market still seems to give it sleepless nights. The Push channel strate
gy adopted by Bridgestone might have made it popular with the dealers (who recei
ve numerous incentives from Bridgestone), but the end customer still considers M
RF as the natural choice, thanks to its high visibility campaigns. Bridgestone n
eeds to take a leaf out of MRFs aggressive ATL promotional campaigns and start ta
rgeting the customer directly. With its international reputation, parent companys
brand equity and strong financial outlay, Bridgestone has all it takes to launc
h a strong promotional campaign to increase its brand equity in the minds of the
consumer.
2) MRF: Masters at Pull strategy, Publicity campaigns and ATL promotional method
s MRF follows exactly the opposite strategy. MRF has mastered the art of Pull st
rategy. It pioneered the practice of heavy advertising and promotion in the tyre
industry. So much so, that today, MRF commands top-of-mind recall and top brand
recognition amongst all tyre manufacturers in India. There is hardly any tyre c
ustomer who hasnt heard of the MRF brand. MRF achieved this remarkable feat by ad
opting a multi-pronged marketing strategy that involved endorsements by sports c
elebrities like Sachin Tendulkar, Brian Lara and Steve Waugh, promoting popular
sports like cricket and car rally races, and even introducing its own mascot: th
e MRF muscleman, that reflected the tough image it projected for its tyres. Over
the years, MRF has perfected the art of publicizing its brand through highly vi
sible events and celebrity endorsements. MRF has consciously aligned itself with
a number of sporting events in India. Its most memorable association with sport
s and celebrity endorsements was the MRF label that adorned Sachin Tendulkars bat
for many years. MRF is also well known for founding the MRF Pace Foundation, wh
ich is today one of the premier training institute for Indias budding pace bowler
s. Though cricket, given its cult like status, gave MRF a lot of publicity, it w
as its sponsorship of auto-racing projected its slogan, Tyres with Muscle and outl
ined the quality of its tyres and allied products Analysis MRF has been immensel
y successful in creating a brand that has become a household name today. Its mar
keting campaign has been one of the most innovative ever in the history of India
n advertising, thus wooing the customer completely. However, MRF Achilles heel s
eems to be its dealer relations. MRF so heavily concentrates on its
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customer promotion activities, that it hardly pays any attention to incentivizin

g the dealers. This is reflected in the very low margins it offers its dealers a
nd the almost complete absence of promotional activates such as discounts, gifts
, compliments, etc for the dealers (called Sell in schemes). Dealers stock MRF t
yres simply because customers demand them. They do not seem to be very keen on p
romoting the product, since the company does not incentivize them to do so. A be
tter incentive scheme for the dealers could change this situation in MRFs favor.
1.2 Porters Generic Strategy Analysis Michael Porter proposes three generic strate
gies that form the foundation for strategic thinking:
1) Overall Cost Leadership strategy: Achieving lowest production and distributio
n costs so that they can price lower than the competitor. This strategy does not
work in the tyre industry for the simple reason that tyres are a highly raw mat
erial-intensive industry. More than 90% of the total cost of production stems fr
om raw material costs. Given this fact, it becomes extremely difficult to produc
e tyres at costs that are significantly lower than that of the competitors, sinc
e raw materials cost the same to all industry players. 2) Differentiation strate
gy: The business concentrates exclusively on achieving a superior performance in
an important customer benefit area.
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Bridgestone -Quality and Value for Money Bridgestone has achieved a high degree
of differentiation in the market by positioning its tyres as international quali
ty with value for money. The success of this positioning is amply clear from the
fact that Bridgestone is the preferred tyre supplier to a majority of Automobil
e OEMs. OEMs generally select suppliers based on the products quality and reliab
ility. Bridgestones main value proposition is its international quality and value
for money. Every Bridgestone customer is assured of a tyre that is of internati
onal standards and will give him trouble-free service for a long time, thus givi
ng him value for his money. MRF-Tyres with Muscles MRF has for log concentrated
on the high performance its tyres offer in trying conditions. To further this im
age, it has partnered with many sports events and created a mascot that reflects
the toughness it claims in it tyres: the MRF muscleman. MRF prides itself in ma
king tyres that go into some of the most trying conditions on Indian roads: onto
Heavy Vehicles on rough Indian roads. Consequently, MRF offers a compelling val
ue proposition to heavy vehicle owners as well as passenger car and two wheeler
owners: Quality tyres that endure in the worst of conditions. It drives home thi
s macho message through its mascot, the MRF muscleman. 3) Focus strategy: In a f
ocus strategy the business focuses on one or more narrow market segments Bridges
tone India- Leaders in the Passenger Car Tyre market Bridgestone India has for t
he past one decade, focused exclusively on the Passenger Car Tyre segment. One m
ajor reason for restricting itself to this segment was that Bridgestone manufact
ures only radial tyres. While the rest of the Indan tyre market still runs mostl
y on non-radial tyres, the Passenger Car market has almost completely been radia
lised. This gave Bridgestone an opportunity to capture market share with its int
ernational quality and value for money proposition. Today, Bridgestone is the ma
rket leader in this category with a share of 31% of the Indian passenger car tyr
e market. MRF- Focusing on heavy duty vehicles Unlike Bridgestone, MRF has a pro
duct portfolio that covers the entire tyre industry. However, MRFs promotional st
rategy focuses moreon the need of the Heavy duty truck and bus driver. This is m
ainly because a majority i=of its sales happe in the Heavy and Light Commercial
Vehicles market. In order to tap this market further, MRF positions its tyres as
tyres with muscle, to highlight its high endurance and strength.
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1.3 Creating Value: 1.3.1 Bridgestone Quality and Value for money: Bridgestones ma
in value proposition is its international quality and value for money. Bridgesto
ne prides itself for making tyres that incorporate the international standards t
hat people world over have come to associate with it. Bridgestone delivers this
value by ensuring that every customer is assured of a tyre that is of internatio
nal standards and will give him trouble-free service for a long time, thus givin
g him value for his money. 1.3.2 MRF Endurance guaranteed: MRF prides itself in
making tyres that go into some of the most trying conditions on Indian roads: on
to Heavy Vehicles on rough Indian roads. Consequently, MRF offers a compelling v
alue proposition to heavy vehicle owners as well as passenger car and two wheele
r owners: Quality tyres that endure in the worst of conditions. It drives home t
his macho message through its mascot, the MRF muscleman. MRF delivers this value
to the customers by guaranteeing that their tyres are designed to endure in the
most trying of Indian weathers and roads. To achieve this MRF regularly tests i
ts tyres in cross-country rallies and other extreme conditions. 1.4 Communicatin
g the Value: MRF takes care to promote its tyres as tough, reliable and high endu
rance. MRF has mastered the art of creating lasting impressions in the mind of t
he consumer. It pioneered the practice of heavy advertising and promotion in the
tyre industry. So much so, that today, MRF commands top-of-mind recall and top
brand recognition amongst all tyre manufacturers in India. There is hardly any t
yre customer who hasnt heard of the MRF brand. MRF achieved this remarkable feat
by adopting a multi-pronged marketing strategy that involved endorsements by spo
rts celebrities like Sachin Tendulkar, Brian Lara and Steve Waugh, promoting pop
ular sports like cricket and car rally races, and even introducing its own masco
t: the MRF muscleman, that reflected the tough image it projected for its tyres.
Today, dealers look forward to stock MRF tyres because customers demand it. Bri
dgestone on the other hand banks more on its ability to incentivize dealers and
also on Word-of-Mouth marketing from its thousands of satisfied customers to pro
mote its tyres. OEMs prefer Bridgestone over other manufacturers because of thei
r positive experience with Bridgestone tyres. Its international links with F1 ra
cing also adds a halo of pedigree around the brand.
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1.5 Capturing the Value pricing philosophies: The tyre market is not a very price
sensitive market. Consumers are more concerned about the tyres functionality, t
han its price. Besides, being a homogenous product, most tyre companies price th
eir tyres at more or less the same levels. International players such as Bridges
tone price their tyres slightly higher than the rest of the market. This is part
ially to demonstrate its superior quality and pedigree. Bridgestone and MRF: Pric
e leaders Bridgestone and MRF have long been leaders in the Passenger Car tyre s
egment. By virtue of their market share, they have traditionally been price make
rs. The rest of the tyre industry has followed the pricing cues set by these lea
ders. Bridgestone- Using Price-Quality inference to its advantage: Many consumer
s use price as an indicator of quality. Bridgestone understands this subtle conn
ection very well. Being world leaders in quality and reliability, Bridgestone ac
tively tries to remind the superior quality factor to its customers by pricing i
ts tyres a little higher than the competition. Consumers are ready to pay this p
rice because they perceive Bridgestone tyres to be value-for-money. The high pri
ces in turn reaffirm the perception of quality product in the consumers mind. Thu
s, higher prices induce a continuous cycle of quality reaffirmation. 1.6 Sustain
ing the Value Building relationships: While MRF banks on its aggressive advertisi
ng campaigns to attract customers to its tyres, Bridgestone pays more attention
to the customers experience while buying its tyres. Bridgestone ensures that its
potential customer encounters a positive experience at every touch point (point
of contact between the customer and its product). To ensure this Bridgestone eve
n goes to the extent of insisting that its its dealers must compulsorily posses
automatic wheel alignment and balancing equipments. This ensures that its custom
ers walk away not only with a good quality tyre, but also a set of perfectly ali
gned wheels. Bridgestone regularly holds camps for its dealers, where the dealer
s are trained in identifying customer needs and catering to them. Bridgestone al
so introduces special schemes and services for its customers regularly, such as
free car checkups, gifts and complements, and special discounts on services susc
h as alignment and balancing.
\
80|P a g e
1.7 Rating the Marketing Strategies of Bridgestone and MRF: This exhaustive study
of the marketing strategies of Bridgestone and MRF has made it very clear that
the two companies follow a very different approach to marketing its products. Wh
ile Bridgestone appears to prefer the subdued BTL form of promotions, MRF has go
ne all out on its aggressive ATL promotion tactics. Both the strategies seem to
be working, though in very different fundamental ways. While MRFs aggressive adve
rtising, celebrity endorsements and event sponsorships seem to have earned it to
p-of-mind recall and high brand recognition amongst individual customers, Bridge
stones focus on quality and dealer incentives seem to have made it extremely popu
lar with the other two customer segments in the car tyre market: The OEMs and th
e replacement dealers market. Both companies can learn a lot from each others mark
eting strategies. While MRF can improve its dealer incentive programs and also f
ocus on communicating its tyres endurance and strength to OEMs, Bridgestone needs
to adapt aggressive ATL promotional methods to improve its brand recall and bra
nd equity in the minds of individual customers.
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REFERENCES
o
Bridgestone tyres: value for money (2009). Retrieved Jan 2, 2010 from
http://www.bridgestonemotorsport.com/Bridgestone/en-gb/About+Us/
o
Tyre input costs soar(2009). Retrieved Jan 2, 2010 from
http://www.livemint.com/2009/11/13142836/BridgestonebullishonIndia.html
o
Tyre-Industry (2009). Retrieved Jan 2, 2010 from
http://www.scribd.com/doc/6739519/Tyre-Industry
o
Overview of the tyre Industry (2009). Retrieved Jan 2, 2010 from

http://www.articlesnatch.com/Article/OverviewOfIndianTyreIndustry/866789 SBI capital
Markets Limited, Indian Tyre Industry: An overview, (2007)
o
o
Bridgestone Has Helped In Faster Radialisation Of Indian Market, (2007). Retrieved
Dec 3, 2010 from http://www.financialexpress.com
CRISIL ratings, MRF financials ,(2008)
o
o
Indian tyre industry: An overview (2009). Retrieved Jan 2, 2010 from
Http://www.domainb.com/tyres/introduction

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Bra dSt t y A a s B and rategyAnalysis

A AmritaViveka anand(09 9005) D DivyaKiron

3.3 4 4.1 3.2.2 MRFIndia BasisofCompetition ImportantCollaborators

Radialisation can be aptly classified as the most important innovation in tyre t

1.8 Maj Players a Market S jor and Shares

1.10 Swot Analysis for the Tyre Industry

MRF Established in 1946 as a small toy balloon manufacturing unit in a shed at T

ANALYZINGTHEMARK KETEN NVIRON NMENT T

1.2 RadialTyres:MeetingtheIndiandriversunsatisfiedneed As with consumers across

1.4 ConsumerBehavior Frequency of purchase in the passenger car tyre industry is s

2.1 CoreCompetencies: 2.1.1 BridgestoneIndia: International Quality and pedigree:

2.2 CompanyResources 2.2.1 BridgestoneIndia

Bridgestone Corporations collaboration with F1 has contributed

and its recognitio

Though MRF had introduced the ZIGMA CC Radial

tyre way back in 1989, it lacked t

3.2 Salientstrengthsandweaknesses: 3.2.1 BridgestoneIndia International Quality an

Dealer relations: MRF almost exclusively concentrates on brand awareness exercis

3.3 Basisofcompetition: Being a homogenous product, there is not much difference in

4.2 CollaboratorIncentives: Automobile OEMs tie-up with well-established tyre manu

5.2 TechnologicalEnvironment: 5.2.1 Indigenous development of radial technology Th

SE EGMEN NTATIO ON,TA ARGETI INGAN NDPOS SITION NING

1.1 ProductlevelsThecustomervaluehierarchy: While devising market offerings, markete

1) Bridgestone: Quality, Comfort, Value for Money Bridgestone differentiates its

market segmented, targeted and th

2) Indirect channels: Indirect channels consist of one or more intermediaries be

Customer OEMs Exports Replacement Channellength 0(Direct) 0(Direct) 2level

c) Exclusive dealers Vs Multi-brand Dealers: Though Bridgestone sells its tyres

Pricing a product is a function of many factors. A number of factors affect the

4.2 :DevelopingEffectivecommunications 4.2.1 Identifyingthetargetaudience: The fi

For each of these segments a appropriate communication strategy needs to be deve

d. Brand Purchase Intention: Self-instructions to purchase a brand or to take pu

As a part of our primary data exercise, we visited 10 tyre dealers in Coimbatore

5. Best selling pattern and size.

2. Which brand is more profitable?

3. Which Brand is more preferred by customers?

4. Price of different brand products

5. Which company provides better after sales service?

MRF Apollo Ceat JK Goodyear

Which companys sell out scheme is most effective?

Apollo Ceat JK Goodyear Bridgestone

Which companys sell out schemes effectively reach the customer?

Total Percentage 5 3 1 3 23.81% 14.28% 4.76% 14.28% 4.76% 33.33%

Goodyear 1 Bridgestone Michelin Birla

Best selling pattern and size. Name MRF Tyres Pattern

Birla Tyres Other Tyres

customer promotion activities, that it hardly pays any attention to incentivizin

Overview of the tyre Industry (2009). Retrieved Jan 2, 2010 from

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