MRF Tyres Strategy Analysis

MRF TYRES

Presented by:

GROUP 1

1Muechen International Business School

BUSINESS STRATEGY

Introduction

• The company, MRF Ltd., originally started as asmall manufacturing unit of balloons, latex castsqueaking toys and industrial gloves.

• A young entrepreneur, K. M. MammenMappillai, opened a small toy balloonmanufacturing unit in a shed at Tiruvottiyur,Madras (now Chennai).

• The company established its first office in 1949at Chennai

• It began the manufacturing of tyres in 1961.2Muechen International Business School

Facts

• In 1961 the Madras Rubber Factory PrivateLimited was converted into a public company.

• Additional capital was issued in order to startthe manufacture of automobile tyres and tubesin collaboration with the Mansfield Tire &Rubber Co., Mansfield, Ohio, U.S.A.

• The Company was given permission to exporttyres having Mansfield trade mark to all worldmarkets except U.S.A. and Canada.


Facts

• The Company was identified as `Star Exporter',a status that enables the company to getpriority treatment in several areas concernedwith customs.

• MRF became the first tyre company in India tocross the INR 10 billion mark in 1993

• The Company has received the Top ExportAward for the year from All India RubberIndustries Association in 1995 and has beenreceiving the same regularly since then.

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Facts

• MRF Tyres has signed an OEM (originalequipment manufacturer) alliance with variousautomobile giants.

• Funskool, the No. 1 toy company in India, is ajoint venture between MRF tyres and theworld's largest toy company Hasbro Inc., USA.


Products

• Tyres


Products

• Conveyor belts


Products

• Pretreads


Products

• Industrial Paints and Coatings


Plant locations in india

• Tiruvottiyur, Chennai

• Kottayam, Kerala

• Usgao, Goa

• Arakkonam, Tamil Nadu

• Medak, Andhra Pradesh

• Pondicherry


INDUSTRIAL MARKETING

• Industrial marketing consists of all activitiesinvolved in the marketing of products andservices to organizations that use product andservices ,in the production of consumer orindustrial goods and services ,and to facilitatethe operations of their enterprises.

• Eg: MRF markets its tyres to variousautomobile giants like Maruti, Tata Motors,Honda,etc.

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Industrial Demand

• The demand for industrial products andservices does not exist by itself. It is derivedfrom the ultimate demand for consumer goodsand services . Therefore Industrial demand isalso called Derived demand.

• Eg. Net sales of MRF tyres was Rs 3274.37crores in the year 2008-09



Competitors

• 1. JK Tyres

• 2.CEAT

• 3. Dunlop

• 4. Goodyear

• 5. Yokohama

KEY COMPETITORS


Major Sales Segments

Demand Categories

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SWOT Analysis

• Company has remained in no.1 position in tyre industry

• They have 6 manufacturing facilities in India (all in south) in proximity of rubber belt of India

• It enjoys strong brand equity and loyalty of customers

strengths

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Complete product portfolio with tyres for all types of vehicles-heavy duty vehicles, SUVs, small & luxury cars

It enjoys strong brand equity and loyalty of customers.

Strong financial position

Weakness

Intense competition due to presence of other global brands

Volatility in industrial relations. Ex: the labour unrest

Opportunity• Emerging markets and growth of automobile industry

• More tie-ups with Automobile companies as it’s mainly into B2B market.

• Horizontal and concentric Diversification.

Threats

• 1.Price wars

• 2. Stiff competition from national and international brands

• 3. Cheaper technologies

Pricing new product

• Skimming strategy .Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’ the market. Usually employed to reimburse the cost of investment of the original research into the product.

• Penetration strategy The price is deliberately set at low level to gain customer's interest and establishing a foot-hold in the market.

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Distribution Channels

• MRF has one of the largest tyre distributionchannel in India. It has divided the indiansubcontinent into 33 regions and has setup aRegional office in each region.

• The basic structure comprises of the following:

• Factory

• Divisional Distribution Centers

• Regional Distribution Centers

• Carrying & Forwarding Agents

• Dealers

• Over 2500 sales outlets all over India


MARKETING STRATEGIES

• Publicity campaigns & promotional

methods

• Pioneered the practice of heavy

advertising and promotion in the

tyre industry

• MRF differentiates itself from the

competition, on its two pillars of

High Quality and Endurance.

ADVERTISING

• Various ads in Televisions

• Billboards

• Sponsors to various racing events

• Sport accessories


Automotive

MRF Tyres Strategy Analysis