MARKETING

Business to Business Marketing

Definition
Business Marketing is the practice of individuals,
or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as

components in products or services they offer, or use

them to support their operations

Industrial Vs Consumer Marketing

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

Consumer Market
Geographically Disbursed Mass Market

Product Characteristic

Technical Complex Customized

Standardize

Service Characteristic

Service , timely Availability extremely Important

Somewhat Important

Buying Behavior

Involvement of Various functional area from both the ends Purchase Decisions are performance based and rational Technical Expertise

Involvement of family members

Purchase decisions are mostly based on Physiological /social/psychological needs Relatively less technical expertise is required

Industrial Vs Consumer Marketing

Areas of Difference Channel Characteristic Industrial Market
More Direct Fewer Intermediaries

Consumer Market
Indirect Multiple layer of Intermediaries

Promotional Characteristic

Emphasis on Personal Selling

Emphasis on Mass Media (Advertising)

Price Characteristic

Competitive Bidding and Negotiated Prices

List Price for Standard Products

List Price or MRP

TYPES OF INDUSTRIAL CUSTOMERS

COMMERCIAL ENTERPRISES GOVERNMENT CUSTOMERS INSTITUTIONAL CUSTOMERS COOPERATIVE SOCIETIES

BUYPHASES IN THE INDUSTRIAL BUYING-DECISION PROCESS

1. 2. 3. 4. 5. 6. 7. 8. Recognition of a problem Determination of the appliccation & qty. Development of specifications Search for & qualifications of potential suppliers Obtaining & analysing supplier proposals Evaluation of proposals & selection of suppliers Selection of an order routine Performance feedback & post-purchase evaluation

SWOT

STRENGTHS
More than 70% turn over is from top 4 Companies. Well established brand names and distribution network by Existing players. High Capital Expenditure creates barriers to new entrants. Tyre and tubes Import/Export Freely allowed

WEAKNESS
Fortune depends on process of key raw material such as rubber and crude oil, any Sharpe rise can impact profitability significantly.

Tyre industry industry is unable to pass on majority

of price hike to end consumer due to high competitive

pressure.

OPPORTUNITY
Strong Growth Infrastructure Development especially roads Shift to redialization can increase profitability in future

THREATS
Prices of raw material Prices of Diesel and Petrol are high. Imported tyres from china is a challenge for Indian manufacturers.

ENTRY BARRIERS-HIGH
Large Capital Required High Raw material cost High risk

BARGAINING POWER OF SUPPLIERHIGH

Raw materials cost accounts for approx. 70% of Tyre Industry Turnover. 63% of total Natural Rubber consumption is by the Tyre Sector, balance by rubber based non-tyre industries.

Number of supplier is less.

THREAT OF SUBSTITUTE-MEDIUM
Imports from chinese market. Entry of international players.

BARGAINING POWER OF THE BUYER-HIGH

CEAT Tata Motors Ashok Leyland M&M Swaraj Mazda,, Caterpillar Hero Honda Apollo Tata Motors FIAT M&M Maruti Suzuki Hyundai Audi MRF Tata Motors Honda M&M Maruti Suzuki

INTER FIRM RIVALRY-HIGH

STPD

Tyre Market Segmentation

Indian Tyre Industry

Commercial Vehicles

Passenger Vehicles

Others

MHCV

HCV

LCV

Cars

Motorcycles

Scooters

Farm

OTR

Industrial Vehicles

MHCV HCV LCV OTR

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

Market Targeting
MRF : Compete Market Coverage
o MRF holds a diversified portfolio of products spanning the entire tyre market.
M1 (Cars) P1 P2 P3 Touring Tyres Sport Tyres Economy Tyres M2 (Trucks) Economy Tyres Mileage Tyres M3 (2-wheelers) High Grip Tyres Touring Tyres

Endurance Tyres Best Fit Tyres

Bridgestone
Market Specialization

Bridgestone India has focused on the Passenger Car Segment exclusively as it offers only radial tyres.
M1 (Cars) P1 Touring Tyres M2 (Trucks) M3 (2-wheelers)

P2
P3

Sport Tyres
Economy Tyres

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

Positioning
Superior Endurance, Strength, Sporty & Home-Grown Punch line: Tyres with Muscle Sponsors Cricket & Rally racing to position as high endurance and sporty

Differentiation
Being a homogeneous product, there is not much difference in products offered by competing tyre manufacturer. However,companies do try to differentiate themselves by outdoing one another insome (POP): Points of Parity such Quality Safety Durability Grip Economy etc. (POD):-Point Of Differentiation High Endurance Tyres High Performance Tyres

4Ps

Product

Product
Core Tyre a customer vehicle can run on Basic Tyre that fits customer vehicle Expected Quality, Safety, Durability, Mileage, Grip, Concerning to breaking, Ride Comfort

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

MRF
Value Proposition Quality and Endurance
Quality- International Standards

Comfort- Smooth and Quite Value for Money

Endurance- Durability on tough Indian roads

Product Mix Dimensions

Passenger Cars ZVTV(7) ZLO(4) VTM(1) SLM(2)

Two Wheelers Zapper FV(1) Zapper FM(1) Zapper FS(3) Rib Plus(6)

Trucks-Buses Super Miller99(4) Steel Muscle SIT4(2)

Farm Services Shakti Super-(12) Shakti Life(12)

LCV Superlug 50 plus-R(1) Superlug 505(2) Supermiler 99 (3)

SCV Steel Master(1) Steel MuscleR(1) Zigma(2) Savari Trek(1)

Steel Muscle (3) Rib(7) The Lug Plus(4)

Trailer707(2) Supermiler 95 (1) Power Tiller(1) Fork Lift Solid(10) Superlug(1) SuperlugR(1)

ZQT(8) ZTX(5) ZSLK(4) ZEL(3) ZVRL(2)

Meteor(2) Zapper YM(1) Zapper Y(8) Zapper Q(8) Zapper Vyde(3)

Muscle rokx(4) Muscle rok(1) M-77(5) Superlug 50 plus R(1) Superlug 555(1)

Savari Lug(1) Savari (1)

Pneumatic(5 Steel ) Master (1)

Passenger Cars ZV2K(20)

Two Wheelers Zapper C(5)

Trucks-Buses Superlug 50 plus (2) Superlug 50(3)

Farm Service

LCV

SCV

ZVT(20) ZCC(2) ZGT(2) ZGP(5) ZVTS(40) NDMS(10) Safari(10) Twintread(2)

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

Passenger Cars Big Rover (2) Estate(1) Swgg(4) SM-12(4)

Two Wheelers

Truck-Buses

Farm Services

LCV

Legend(3)

Product Mix=304

Place
First Identify the Customer Base Replacement

OEM
Exports

Distribution Channels (Direct and Indirect)

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

Indirect Channel

One or more intermediaries between tyre manufacturer and final consumer

Channel Length
No of intermediaries between Manufacturer and end user

Channel Management
Selection of Dealer

Training and motivating Channel Members

Effective Consumer Response Practice

Pricing
Highly Raw Material Intensive Industry Mark Up pricing strategy is used - Tyre market not very Price sensitive - More concern about functionality Bridgestone Uses Price- Quality inference Dealer Discounts and allowances - Less in MRF compared to Bridgestone

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

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

The blimp is 19 metres long, 400 cubic metres of Helium, maximum height of 1000 feet

TATA STEEL
Amoung top 10 global steel companies Annual steel capacity over 28 mtpa Oprations in 26 countries and commertial presence in more than 50 countries Turnover of 26.13 billion US $ in FY 2011 12

Customer Value Management CVM

Shortlisting of customers Set up cross functional team Joint team formation Study the entire value chain of oprations

Customer Value Management CVM

Key performance indices Brainstorming Shortlisting of ideas Hygiene ideas Oprational improvement ideas Joint study ideas Further evaluation

CVM Benefits
Saving cost across value chain of oprations Deep insight and appreciation of customers problems Changed focus Strong bonding with customers

Industry Analysis
Industry: Internet services and technologies Major Sectors: Advertising Search engine Cloud computing

Primary Revenue Source: Advertising (97%) Constantly evolving Industry

Google Product Offerings

Most popular Google sites

Marketing Strategy
USP: Google facilitate the efficient organisation, storage and retrieval of data/information across a wide (online) platform. The result is a convenient, customizable, co-creation approach to media sharing for the use of individuals and organisations alike. Profit formula: Mostly dependent on advertising (97%), other main areas is software licencing to businesses

Positioning Analysis
The Google company is positioned as: Solution-centric Innovative Socially responsible Vast networks, deep knowledge Google Advertising network Advertiser-friendly Traceable metrics Google Analytics Credible, tasteful advertising Rewarding for all parties (advertiser, host & viewer)

Segmentation & Targeting

The Google company: Offers products that generally appeal to a mass market Doesnt matter what you are using the web for Search is the common denominator for everyone; a home-base from which to begin your journey Target web users all over the world particularly North America, Europe, Russia, Australasia

Google Advertising: Targets advertisers whose market frequent the internet Can be targeted with precision at a local or worldwide level

Google Brand Value

Household name Verb in Websters dictionary Interbrand Brand of the year, 2003 Quantifying Brand Value Google offerings are largely free Customer feelings - Love, Loyalty, Share of heart

Competitive Advantage
Brand image Infrastructure servers, storage systems, hardware Resource abundance Scalability Wide knowledge base Ability to branch off into other areas