PROJECT REPORT ON

MARKET ANALYSIS AND CONSUMER BEHAVIOUR TOWARDS J.K TYRE IN TRUCK SEGMENT

Guided BySubmitted ByProf. Gurdip sir Deepak Gupta Hemant Chanderiya

MBA III Sem (Sec

X)

CERTIFICATE OF FACULTY GUIDE

This is to certify that Deepak Gupta and Hemant chanderiya student of M.B.A III Sem have completed their Marketing Project on Consumer behaviour towards J.K tyre in truck segment and have undergone discussions with me on various issues related with project. They have sincerely worked on the project and have prepared project report under my guidance.

Signature of Faculty Guide

Name of Students Deepak Gupta Hemant Chanderiya

ACKNOWLEDGEMENT Words can never express the extent of indebtedness. But we still wish to express our deep sense of gratitude to all the people who supported me in the completion of this project report. At the outset we would take this opportunity to express our sincere most gratitude towards Prof. Gurdip sir, Medicaps Institute of Technology and Management, Indore, for providing us the opportunity to undertake and accomplish this project. We wish to express our regards to Prof. Gurdip sir, faculty member Medicaps Institute of Technology and Management, Indore, under whose esteemed shelter, I had the privileged opportunity to work. We will be failing in our duty if we do not express our sincere gratitude to our family & our friends for their constant moral support and encouragement throughout study.

CONTENTS

CHAPTER NO.

TITLE Overview of tyre industry

1.

2.

Company Profile

3.

Products Objective of the study

4.

5. 6. 7.

Research methodology Data interpretation and analysis of data

Findings Suggestions & conclusion Bibliography Appendix

8. 9. 10.

Overview of the industry

The Rs.20,000 crore Indian Tyre Industry, is highly raw material intensive and predominantly a Cross Ply (or Bias) tyre manufacturing industry. It produces all categories of tyres, except Snow Tyres and Aero Tyre for which there is no demand domestically. Indian tyre industry is highly concentrated wherein 10 large manufacturers account for over 95% of the total tonnage production of 11.35 lakh M.T. On an average, 55% of the production is for replacement market, followed by 29.8% sold to OEMs directly and the remaining is exported. Over the years, tyre manufacturers have developed a vast marketing network using dealers and depots and as such all types of tyres are now easily available even in the remotest corner of the country. No doubt, international auto majors in India now roll out their vehicles using Indian manufactured tyres. Slowdown in automotive industry and global economic in general negatively impacted the Indian tyre industry in 2009. The industry tonnage growth was only 2.19% during first nine months of FY09, compared to 7.38% growth experienced during the same period last year. Demand side was also severely affected as almost all auto manufacturers were forced to adjust their production last year. A major relief for tyre manufacturers was provided by the government by reducing the excise duty on tyres from 14% to 10% in December 2008, and further to 8% in February 2009. Increasing Cost of Raw Materials: Raw materials primarily comprise of natural rubber, crude and steel based materials which have historically experienced volatility in prices, especially during the last few months when price of domestic natural rubber increased almost 40%. Given the fact that raw materials constitute around 70% of the cost of production, combined with the manufacturers" inability to pass on the increased cost to their customers due to intense competition, rise in prices of these materials have a huge impact on profitability. Increasing Radialization: Unlike in the developed countries, radialization has not yet reached its dominance in India. Particularly the truck, bus and LCV segments continue to be largely a cross ply based. Despite offering higher mileage, lower fuel consumption and improved safety, radial tyres have not yet caught on primarily because of poor road conditions and high initial cost which is approximately 25% higher than bias tyres. Moreover, the two important raw materials required for producing radial tyres (Steel Tyre Cord and Polyester Tyre Cord) are not manufactured domestically. Moving towards radialization will be vital if tyre producers want to protect their share in international markets. As of 2008, radialization as a percent of total production in passenger car tyres, LCV and heavy vehicles was 95%, 12% and 3% respectively.

Increased Dumping: Besides material price fluctuations and lack of radialization, the industry is also suffering intense competition from low priced tyres from China and other South East Asian countries. Despite being of a better quality, Indian manufactured tyres loose ground when it comes to pricing. Moreover, slowing automotive demand from developed countries has made India a lucrative market for cheap tyres, thus resulting in increased dumping of cheap tyres from China. Retreading: Another area of concern for the tyre manufacturers is the increasing retreading, where the worn out tread of the old tyre is replaced with a new tread. Retreading costs approximately 20% of a new tyre and is therefore gaining popularity, especially in Southern part of the country. Elgi Tyres and Tread Ltd are the two major retreaders in India. Significance of such retreaders can be gauged by the fact that around 85% of the tyre demand is for replacement. Unresolved Tax Issue: The issue of inverted tax structure, wherein the import duty on natural rubber is 20% but import duty on finished tyres is as low as 10% still remains unaddressed. Operational inefficiency and taxation issues have being denting the competitiveness of Indian tyres. Global Expansion: Several manufacturers are now moving global and are setting up manufacturing bases overseas. After acquiring Dunlop three years ago, Apollo Tyres recently acquired Vredetein Banden in Europe. JK Tyres acquired Tornel, a Mexican company last year to penetrate into American tyre market. Despite these challenges, according to CARE Research, while the industry may register a tonnage growth of only 4.27% in FY09, the long term prospective seems to be bright. They expect the industry to experience a CAGR of approximately 8.21% between FY08 to FY13. Automotive companies have started experiencing increasing sales and raw material prices are stabilizing which will boost tyre sales over the coming months. However, experts suggest there will be some time lag before profitability picks up as tyre manufacturers are still carrying high cost inventories. Company Profile JK Tyre & Industries Ltd is one of the leading automotive tyre manufacturers in India. The company is engaged in manufacturing of automobile tyres, tubes and flaps. They manufactures Radial and Bias 4-wheeler tyres for trucks, buses passenger cars, LCVs, tractors etc. They sell their products under the brand name 'JK Tyre'. They have four plants located in Rajasthan, Madhya Pradesh and Karnataka. The company has 134 sales, service and stock points located throughout the country. They have over 3,500 dealerships across India. The company's customer base covers virtually the entire Original Equipment Manufacturers in India together with Replacement Market for four wheeler vehicles, Defence and State Transport Units. Besides India, they have a worldwide customer base in over 45 countries across all six continents. JK Tyre & Industries Ltd was incorporated in the year 1951 as a private limited under the name JK Industries Pvt Ltd. Until March 31, 1970, the company was engaged in the managing agency business. Thereafter the company decided to undertake manufacturing activities and obtained a letter of intent in February 1972 for the

manufacture of automobile tyres and tubes. The company name was changed into JK Industries LTD with effect from May 24, 1974 consequent upon conversion of the company into a public limited company. In the year 1974, the company entered into a technical collaboration with General Tire International Co, USA, a subsidiary of General Tire & Rubber Co, USA for technical services and sales agreement for the supply of technical know how engineering and documentation for operational facilities. In the year 1989, the company introduced several new patterns and sizes of tyres including a semi-lug Nylon Truck tyre. In the year 1991, the company set up Banmore Tyre Plant with a capacity of 5.7 lakh tyres per annum. They launched radial tyres for tractors. In the year 1992, the company's international division expanded their activities by opening their office in Moscow. In addition, they set up a Research and Development center at HASETRI. In the year 1993, they introduced new radial tyres namely, Brute and Ultima and in the next year, they launched 'Jet Track-39' to meet the need of the heavy load market. In June 1997, the company acquired 51% stake in Vikrant Tyres Ltd from Karnataka Government. They launched India's first H-Rated tyre. During the year 1998-99, as per the Scheme of Arrangement between the company and JK Drugs & Pharmaceuticals Ltd, the pharmaceutical undertaking of the company was transferred to and vested in JK Drugs & Pharmaceuticals Ltd with effect from appointed date July 1, 1996. During the year 2002-03, as per the Scheme of Arrangement and Amalgamation between the company, JK Agri, JK Sugar and Vikrant Tyres Ltd, the agri-genetics undertaking of the company was transferred to JK Agri, the sugar undertaking was transferred to JK Sugar and Vikrant Tyre Ltd was amalgamated with the company. During the year 2004-05, the expansion of capacity of Truck/ Bus Radials by 50% was completed. In addition, the expansion of the passenger radial capacity was completed. In December 2006, as per the Scheme of Arrangement and De-merger between the company and Netflier Technologies Ltd (name since changed to Netflier Finco Ltd), the business of holding and dealing in investments and some other assets and properties of the company and liabilities and obligations thereof stood transferred to and vested in Netflier Finco Ltd. In addition, Hansdeep Investment Ltd, Hidrive Finance Ltd, Panchanan Investment Ltd and Radial Finance Ltd ceased to be the subsidiaries of the company. During the year 2006-07, the company introduced a new tyre, offering high mileage 'Jet One' and launched new Semi-Lug and Rib pattern Truck Radial tyres. They also diversified into Special Application Tyres and commenced their exports. In order to capture the brand 'JK Tyre' and their value in the name of the company, they changed their name to JK Tyre & Industries Ltd with effect from April 2, 2007. The company entered into an arrangement with BEML for supply of OTR tyres on a long-term basis. In June 2008, the company acquired the controlling interest in Empresas Tornel, S A de C V (Tornel), a company incorporated under the laws of Mexico, by acquiring 100% of their equity capital for a consideration of USD 28.75 million. Tornel has three tyre manufacturing plants in Mexico with a combined capacity of 6.6 million tyres per annum During the year 2008-09, the company doubled the capacity of Truck/Bus Radial plant to 8.00 lakh tyres from 3.67 lakh tyres per annum at an estimated project cost of Rs. 315 crore. This has further strengthened JK Tyre's commanding position in the fast growing Truck/Bus segment. The company has undertaken a project for substantial expansion of their OTR tyre capacity at a capital outlay of Rs. 120 crore, which is expected to be completed by 2010

Products(Truck/ Bus)

JET-TRAK 39 SIZE 10.00-20 18PR LUG APPLICATION TRUCK REARHEAVY LOADS

JET-TRAK SIZE APPLICATION

8.25-20 14 PR, 9.00- TRUCK REAR20 16 PR, 10.00-20 16 NORMALPR LUG MODERATE LOADS

HIGRIP

SIZE 8.25-20 10 PR/ 8.25-20 12 PR/ 9.00-20 12 PR CROSS COUNTRY TYPE

APPLICATION TRUCK ALL WHEEL DEFENCE SEGMENT

SAND CUM HIGHWAY SIZE 12.00-20 18/20 PR SAND CUM HIGHWAY APPLICATION DEFENCE

JETKING SIZE 9.00-20 16 PR, 10.00-20 PR LUG 5 APPLICATION TRUCK & BUS REAR-NORMAL LOAD

JET RIB SIZE 9.00-20 14/16 PR, 10.00-20 16 PR APPLICATION TRUCK (FRONT WHEEL)/BUSES(ALL

RIB

WHEEL)

NULIFE SIZE 9.00-20 10/14 PR, RIB APPLICATION ALL WHEEL POSITION IN BUSES

NULIFE SIZE 9.00-20 10/14 PR, RIB APPLICATION ALL WHEEL POSITION IN BUSES

JK Tyres premium brand identity can be attributed to factors such as superior technology, performance and the durability of its products. Over these years, apart from ushering in the era of radial technology in India, JK Tyre has pioneered the manufacture of T-rated radials (capable of running at speeds of 190 km/hr) and H-rated radials (capable of running at speeds of 210 km/hr). In line with global trends and anticipating high levels of radialization in the truck and bus segment, JK Tyre established Indias first and only allsteel truck/bus radial production facility. Its two brands, JK Tyre and Vikrant, together offer a wide range of products catering to almost all the sectors of the automotive industry trucks, buses, light commercial vehicles, cars and tractors.

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE To study the attitude and satisfaction among the consumers(truck drivers & fleet owners) for J.K. tyre in truck segment. SECONDARY OBJECTIVE 1) To study and analyze various factors that influence the consumers to purchase the tyre 2) To analyze the factors influencing perception and buying decision of consumers. 3) To find out the effectiveness of brand of J.K. tyre.

SCOPE OF THE STUDY

This study attempts to identify consumer behaviour towards J.K. tyre in truck segment and the problems faced by him with the tyre. This will help company to formulate its strategies and build its market share.

LIMITATIONS OF THE STUDY

1. The geographical scope of the study is limited to Transport Nagar near Bhanwarkuwa indore. 2. The sample size is confined to 50. 3. The targeted consumers were truck drivers & fleet owners. 4. The Respondents were not well educated and some were illiterate so the answers of few questions were not on the higher side.

RESEARCH METHODOLOGY
RESEARCH DESIGN The Research Design adopted in the study was descriptive in nature because the study aims at describing the situation as it exists at present. It shows the consumer behavior and brand loyalty for J.K. tyre. SAMPLE SIZE The Sample Size of this study is 50. POPULATION The Population of this study is truck drivers and fleet owners. SAMPLING METHOD The study involves area sampling method. Area sampling method involves selecting a probability sample of geographic areas and selecting units or individuals within the selected areas for the sample. SOURCES OF DATA The Study used both Primary and Secondary data. PRIMARY DATA The primary data was collected from the respondents using questionnaire. SECONDARY DATA The Secondary data was collected from the companys official website, books, and journals and so on.

METHODS OF DATA COLLECTION Data was collected from the customers with the help of a questionnaire. DATA ANALYSIS METHOD The data was analysed from the main study and based on that conclusion is drawn and suggestions are made.

Data Interpretation and Analysis of Data

Have you purchased J.K. tyre for your vehicle? a)Yes b) No The significance of this question is: To find out whether the person has ever purchased the J.K. tyre for his vehicle and what are the reason for switching to other brands. Yes No 47 3 94% 6%

Q.2 When was last tyre fitment done in your vehicle? a) Less than 3 month ago c) 6-9 months ago The significance of this question is: 1. 2. To find out the condition of tyre after number of months of use (by this we are finding out the performance of tyre). To find out the duration or gap of demand by customers. Less than 3 months ago 3-6 months ago 6-9 months ago 9-12 months ago 13 24 9 4 26% 48% 18% 8% b) 3-6 months ago d) 6-12 months ago

Q.3 Which of these tyres have you compared while purchasing? a) J.K tyre d) Apollo tyre b) MRF tyre e) Bridgestone tyre c) CEAT tyre f) others

The significance of this question is: 1. To find out the organizations in the tyre industry which are running neck-to-neck in customers mind while making decision for tyre fitment. 2. By this question we can easily find out the close competitors in the market. MRF Tyres 14 28%

JK Tyres Ceat Tyres Apollo Tyres Bridgestone & others

12 8 12 4

24% 16% 24% 8%

Q.4 On what basis have you compared these tyres ? a) Mileage d)Brand image b) Price e)Advertisement c) Durability f) Mechanic/ tyre fitters advice

The significance of this question is: 1. This is very basic & conclusive question by which we can find out the basis or criteria of comparison done by customers. 2. This question provide us the points which can affect the perception of customers 3. The answer of this question can lead to product innovation and marketing strategies. Mileage Price Durability Brand image Advertisement Tyre fitters advice 60 57 54 46 00 00 56% 24% 14% 6% -----------------

Q.5 Which brand of tyre will you prefer for front wheel? a) J.K tyre d) Apollo tyre b) MRF tyre e) Bridgestone tyre c) CEAT tyre f) others

The significance of this question is: 1.This question helps us to identify customer preference for front wheel tyre. 2. Who are the leading players in front wheel? MRF Tyres JK Tyres Ceat Tyres 11 16 8 22% 32% 16%

Apollo Tyres BridgestoneTyres/others

11 4

22% 8%

Q.6 Which brand of tyre will you prefer for rear wheel? a) J.K tyre d) Apollo tyre b) MRF tyre e) Bridgestone tyre c) CEAT tyre f) others

The significance of this question is: 1.This question helps us to identify customer preference for rear wheel tyre. 2. Who are the leading players in rear wheel? MRF Tyres JK Tyres Ceat Tyres Apollo Tyres Bridgestone Tyres/others 13 18 3 12 4 26% 36% 6% 24% 8%

Q.7 Rate the brands in context of quality?(1 to 6 ranking) (a) J.K. tyre (e) Bridgestone (b) MRF tyre (f) Goodyear (c) Apollo tyre (d) CEAT

The significance of this question is: 1.By this question we come to know about the quality of tyres and strategies followed by companies to improve them. 2. Customers loyalty towards brand based on the quality provided. MRF Tyres JK Tyres Ceat Tyres Apollo Tyres Bridgestone Tyres/others 2 1 4 3 5

Q.8 Are you satisfied with the J.K tyre claim policy? a) Highly satisfied b) Satisfied c) Not satisfied d) Highly not satisfied

The significance of this question is: It helps to identify customers satisfaction and companies transparency in settling claim raised from customers. Highly satisfied Satisfied Not satisfied Highly not satisfied context of after sales service?(1 to 6 ranking) (a) J.K. tyre (e) Bridgestone (b) MRF tyre (f) Goodyear (c) Apollo tyre (d) CEAT 18 27 5 00 36% 54% 10% ---------Q.9 Rate the brands in

The significance of this question is: This question helps to identify companys policy for after sales service. This helps to retain customers. MRF Tyres JK Tyres Ceat Tyres Apollo Tyres Bridgestone Tyres/others 1 2 4 3 5

Q.10 Are you satisfied with the price of J.K. tyre? a) Yes b) No

The significance of this question is: This helps to know consumer perception towards price of tyre. Company accordingly can plan to change the price. Yes No 34 16 68% 32%

FINDINGS
1. After analysing the data we found that 100% of the respondents were aware of J.K. tyre brand and out of that 96% of customers have purchased J.K. tyre for their vehicle (truck). 2. Truck drivers and fleet owners were targeted for the survey, and nearly 48% of the customers had their tyre fitment in 3-6 months. As per the survey average life of tyre for heavy vehicle lasts for 55,000 km. 3. Customer while purchasing tyre compares some companies. The major comparison is between J.K. tyre, MRF tyre and Apollo tyre. Some are brand loyal so they purchase tyre of only one company. And some are price sensitive and prefer china tyre. 4. From the findings, the first and foremost criteria for purchasing tyre was mileage and other was durability and price. None of them answered for advertisement. 5. The front wheel of vehicle is utilized more compared to rear wheel as it is used to take turn so due to friction its life is less. Vikrant is a J.K. tyre brand which is doing extremely good and is used by most of the truck drivers and has good mileage. As it is targeted for economy class so is the reason truck drivers prefer it over other brands. 6. For rear wheel J.K. tyre is mostly preferred. The major competitors are Apollo and MRF. 7. J.K. tyre is the leader in truck segment and rest Apollo and MRF are its close competitors. It is also getting competition from china tyre as it is cheaper than other tyres. Fleet owners prefer J.K. tyre , Apollo and MRF.

8.Based on the quality and after sales service customers dont find any major difference among companies. J.K. tyre , Apollo and MRF have good quality and after sales service. 9. As the price of all major players of tyre are almost same so customer dont find any high level of satisfaction with J.K. tyre. Findings result that customer is not satisfied with the price of any brand. Also frequent price hike in tyre due to fluctuating rubber price also withdraws satisfaction on that front. 10. It is found that many customers prefer JKs guaranteed tyres such as JET TRAK 39 and economy class rib tyre VIKRANT TRACK KING for its milage & reliability.

SUGGESTIONS
1. J.K. Tyre is doing well in rib segment(front wheel) but they are based in only on one brandVikrant. So JK should try to increase the awareness of other brands. 2.Price-Quality relationship needs to improve in premium rib and lug tyre segment. 3. Keep eye to reduce the cost of manufacturing. So that price can be further reduce and competition will increase. 4. The company should look after its tread erosion/breaking problem 5. The company should look after its edge breaking problem in tyres (NTC) due to air.

CONCLUSION

JK Tyre should go for more advertisements in order to create the Brand Image & to increase the awareness level of customers towards JK Tyre. JK Tyre should go for Hoardings as the mode of advertisement. As truck drivers spend most of the time on road in driving, so hoarding becomes most effective means of advertising.

We should also have a keen check on market scenario & our competitors.

We should try to make our product more competitive & durable & should try to create better network & provide our customers with better service at lower cost. JK Tyre should organize more customers & dealers meet in order to create better brand image. J.K. tyre should resolve the problem of air breaking(NTC) and should improve its quality more.

Bibliography
We have collected data from: Official website of J.K. tyre - www.jktyre.com - www.wikipedia.com Information gathered during the project from different respondents.

QUESTIONAIRE
Q.1 Have you purchased J.K tyre for your vehicle? (a) Yes (b) No

Q.2 When was last tyre fitment done in your vehicle? (a) Less than 3 months ago months ago (b) 3-6 months ago (c) 6-9 months ago (d) 6-12

Q.3 Which of these tyres have you compared while purchasing? (a) J.K. tyre (b) MRF tyre (c) CEAT tyre (d) Apollo tyre (e) Bridgestone tyre (f) others Q.4 On what basis have you compared these tyres? (a) Durability (b) Brand image (c) Price (d) Mileage (e) Advertisement (f) Mechanic/Tyre fitters advice Q.5 Which brand of tyre will you prefer for front wheel? (a) J.K. tyre (b) MRF tyre (c) CEAT tyre (d) Apollo tyre (e) Bridgestone (f) others Q.6 Which brand of tyre will you prefer for rear wheel? (a) J.K. tyre (b) MRF tyre (c) CEAT tyre (d) Apollo tyre (e) Bridgestone (f) others Q.7 Rate the brands in context of quality (in 1 to 6 ranking)

(a) J.K. tyre (f) Goodyear

(b) MRF tyre

(c) Apollo tyre

(d) CEAT

(e) Bridgestone

Q.8 Are you satisfied with the J.K. tyre claim policy? (a) Highly satisfied (b) Satisfied (c) Not satisfied (d) Highly not satisfied Q.9 Rate the brands in context of after sales service? (a) J.K. tyre (f) Goodyear (b) MRF tyre (c) Apollo tyre (d) CEAT (e) Bridgestone

Q.10 Are you satisfied with the price of J.K. tyre? (a) Yes (b) No

NAME:- .. AGE:- VEHICLE TYPE :-.................................