Market Penetration Strategy for New Market

SIP project
report

Submitted in partial fulfillment of the requirements for the

PGDM Program
2019-20

By JANAK GUPTA

19PGDM034

Supervisors: 1. Mr. Sayanta Ghatak (Company Guide)

2. Prof. Harshit Maurya (Faculty Mentor)

International Management Institute New Delhi

2019-21

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 ACKNOWLEDGEMENTS

I would like to express my sincere gratitude to Mr. Sayanta Ghatak, International Market
Manager at Phillips Carbon Black Limited for his continuous guidance, monitoring and
encouragement throughout the course of my project. Under his mentorship, I had freedom to
pursue my project and was given sufficient data to do the same.
I would also like to extend my heartfelt thanks to my faculty guide, Prof. Harshit Maurya for
giving her valuable time in monitoring my project.
Finally, I extend my sincere thanks to the entire team at PHILLIPS CARBON BLACK
LIMITED for providing me with a great learning experience and giving me an opportunity to
interact with some of its top management team. I would also like to extend my humble gratitude
to the whole team for entrusting some of their crucial data with me.

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 SELF- DECLARATION

I do hereby declare that this SIP Report Titled “Market Penetration Strategy for New Markets -
USA“ submitted to the International Management Institute New Delhi, in partial fulfillment of the
Summer Internship Project , is an original work done by me under the Auspices of the Placement
Office of International Management Institute, New Delhi. This work has not been submitted to
any other University/ Institution for any purpose.

Signature
Name: Janak Gupta
Roll Number: 19PGDM034
Program and Batch details: PGDM (2019-21)
Date: 10 July 2020

Signature
Professor
Faculty Mentor:
International Management Institute New Delhi
Date:

Signature
Professor
Dean/Chair Career Development:
International Management Institute New Delhi
Date:

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Table of Contents
Acknowledgement .................................................................................................................................. 2
Internship Completion Certificate........................................................................................................... 3
Self- Declaration ..................................................................................................................................... 4
Executive Summary ................................................................................................................................ 6
Introduction ............................................................................................................................................ 7
Objectives of the Study........................................................................................................................... 9
Methodology Adopted............................................................................................................................ 9
Project Flow Timeline ........................................................................................................................... 10
Global Carbon Black Market ................................................................................................................. 11

Industry Overview ......................................................................................................................... 11

Industry Segmentation .................................................................................................................. 11
Industry Growth Drivers ................................................................................................................ 13

Industry Restraints......................................................................................................................... 13
North America Carbon Black Market .................................................................................................... 15
USA Market ................................................................................................................................... 16

USA Tire Market ................................................................................................................................... 17

SWOT Analysis ...................................................................................................................................... 19
Porter’s Five Forces Model ................................................................................................................... 20

Product Strategy ................................................................................................................................... 22

Market Penetration Strategy ................................................................................................................ 23
Logistics Strategy .................................................................................................................................. 27

Marketing Strategy ............................................................................................................................... 29

Recommendations ................................................................................................................................ 34
Bibliography & References.................................................................................................................... 35

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Executive Summary

Phillips Carbon Black Ltd. Is the leading producer of carbon black in India. It is also the 7th largest
producer of carbon black in the world. However, its presence in USA market is very limited and
have low market share. Since, USA is one of the largest producers of automobile tires and hence,
a major consumer of carbon black. So, to compete on a global level it becomes very important
PCBL to gain a substantial market share in USA.
Looking at the current status of company in other geographies and performance in recent years, it
is clearly visible that PCBL has a huge potential and can be game changer in USA carbon black
market.
My part of job is to do various researches & market analysis, and come with Market Penetration
Strategy for PCBL to enter USA market.

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Introduction
Phillips Carbon Black Ltd. (PCBL), is the leading carbon black manufacturer of India. It is also
the leading carbon black exporter in India. It is a part of RP-Sanjiv Goenka Group. The company
was incorporated on March 30, 1960, in collaboration with US oil company, Phillips Petroleum.
Managing director of PCBL is Mr. Koushik Roy. Currently, PCBL is the 7th largest carbon black
manufacturer of world, with a market share of 10% in Asia excluding China.

Carbon Black is basically the pure elemental carbon which is in the form of black granules. It is
mainly used as a reinforcing agent in rubber. Besides this, it also has its applications in coatings,
inkjets, printing materials, fibers, etc.

Figure 1: Carbon Black manufacturing Process

The company has a presence in more than 30 countries across globe. It produces more than 60
grades of carbon black ranging from rubber black to specialty black. PCBL is the only carbon
black company in the world to have “Carbon Credits” under Kyoto Protocol of United Nations
Framework Convention on Climate Change (UNFCCC).
Currently PCBL has 4 manufacturing facilities located at Mundra (Gujarat), Palej (Gujarat),
Durgapur (West Bengal) and Kochi (Kerala). All the manufacturing plants are strategically in
different parts of the country and near the seaports. This enables the company to cover all the
domestic markets, and also to export the product easily and efficiently. The strategic locations of
these manufacturing facilities not only allow easy access to raw materials and international
customers, but also enables easy-grid connectivity that facilitates supply of excess energy. These
manufacturing plants have a combined manufacturing capacity of 5,71,00 MTPA carbon black
and 84 Megawatts of green power.
PCBL has an annual turnover of around Rs.3529 Crores in FY 2018-19. Currently, PCBL has more
than 95, 000 shareholders and more than 800 customers across globe. PCBL has an efficient supply
chain network comprising of over 200 partners. There are more than 950 members in PCBL team.

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PCBL is highly dedicated for society upliftment and holds a good CSR reputation. In FY 2018-19,
PCBL spent Rs. 3.74 Crores in CSR activities.
PCBL currently deals in two product segments, “Rubber Black” for rubber applications and
“Specialty Blacks”. For rubber black segment, PCBL has its brand “Orient black”, whereas for
specialty black segment, PCBL has registered trademark, “Royale Black”.
This project lies in the “International Market” domain of PCBL, which is an integral part of
marketing department.

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Objectives of the Study
The project is aimed at following objectives –
• To understand the product and analyze the Global Carbon Black Market.
• To understand the working of organization.
• To analyze the USA carbon black market.
• To determine growth drivers and restraints for carbon black industry.
• To do competitor’s analysis.
• To do customer’s analysis.
o Analyze USA Tire Industry.
o Identify manufacturing locations of tire manufacturers in USA.
• To derive Product Strategy for target market.
• To derive Logistics Strategy for target market.
• To derive Marketing Strategy for target market.
• To derive Market Penetration Strategy for target market.

Methodology Adopted
• Understanding the product and target market in terms of opportunities and threats.
• Getting information about PCBL’s present status in target market.
• Secondary Research through Industry Analysis Reports, News Reports, Company Annual
Report, Company Website and Social Media handles, Competitor’s Websites, and other
online sources.

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Project Flow Timeline
Week 1: To understand and gain knowledge about Global carbon black market.
Week 2: To gain knowledge about PCBL and design a Project Flow.
Week 4: To do customer and competitor analysis. To segment customers and to locate their
manufacturing facilities.
Week 6: Understand Market Penetration Strategies. And to find out various market penetration
strategies followed by various other companies.
Week 7: To design a Logistics Strategy for PCBL.
Week 8: To design Marketing Strategy for PCBL.
Week 9: Final Report Submission and Presentation.

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Global Carbon Black Market
Industry Overview
As per 2018, the Global Carbon Black Capacity is 15.78 Million Metric Tons. The Global demand
lies somewhere around 13.13 Million Metric Tons, which is expected to grow at a CAGR of 3.5-
4% until 2022. The major factor responsible for growth in carbon black market is growing demand
from tire and industrial rubber production. However, substitution by silica and environmental
concerns are expected to hinder this growth.

Figure 2: Global Demand & Supply of Carbon Black

Source: PCBL Annual Report

Industry Segmentation
Carbon Black Industry is basically segmented on the basis of three factors:
• On the basis of process type – In this classification, carbon black is divided in four
segments on the basis of manufacturing process. They are:
o Furnace Black
o Lamp Black
o Gas Black
o Thermal Black
Furnace Black has the largest of 81.4%. This segment is also the fastest growing segment
by volume, having a CAGR of 4.36%.

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 Process Type by Volume Share
2.72% 4.12%

12.02%

81.14%

Furnace Black Thermal Black Lamp Black Gas Black

Figure 3: Carbon Black Volume Share by Process Type

Source: Mordor Intelligence Analysis

• On the basis of application - In this classification, carbon black is divided in six segments
based on applications. They are:
o Tire and industrial rubber products
o Toner ink
o Textile Fibers
o Plastics
o Paints & Coatings
o Others

• On the basis of geography – For our project, this is the most important and relevant
classification. In this, carbon black market is basically divided into five geographies:
o Asia Pacific region
o North America region
o Europe region
o South America region
o Middle East & Africa region

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 Figure 4: Carbon Black Market Share, by Region

Industry Growth Drivers

• Increasing Demand in Tire Industry – The number of new tire plants are increasing in
North America and Asia Pacific region. Many big companies are planning huge
investments in tire manufacturing facilities. For example, CEAT Ltd. Is planning an
investment of USD 413.50 Billion in new tire production facilities. By 2023, at least 22.3
million more tires are expected to be available.
• Growth in Construction Sector – This is another major factor which is boosting growth
of carbon black industry. Construction industry is continuously growing at a rate of 5-6%
in North America and Europe.
• Increasing Market Penetration of Specialty Black – With the increasing use of durable
plastic consumption of specialty black is continuously increasing. Specialty black is used
in applications such as inkjets, molds, paint, plastics, fibers, sheets, etc.

Industry Restraints
• Substitution by Silica – Carbon black can be substituted by precipitated silica for
reinforcing purpose. There are many factors in which silica can be used as a better
alternative over carbon black. This can hamper the growth of the industry.
• Environmental Concerns – Manufacturing of carbon black leads to the emission of huge
amount of Nitrogen Oxide (NO2), Sulphur Dioxide (SO2) And other harmful gases. It has
several environmental and health concerns. Carbon Black is also classified as Group 2B
carcinogen by International agency for Research on Cancer for humans and animals.
However, with increasing advent of technology, more focus is being derived towards
production of eco-friendly carbon black, which would help in reducing these concerns in
coming period.

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In global carbon black industry, top 10 companies hold 60% of market share. Cabot Corporation
is the leading producer of rubber carbon black, where as Orion Engineered Carbons is the largest
producer of specialty carbon blacks.
Generally, Asian players have an edge over Western carbon black manufacturers due to abundant
availability of coal-based feedstock. Whereas, western carbon black manufacturers have low
operational cost due to high technology. They have up to 35 percent low input costs than Asian
players.

Figure 5: Global Demand & Capacity Analysis

PCBL Global Presence -

World demand for Carbon Black: 13463000 Tons
Indian demand for Carbon Black: 984630 Tons
Demand in rest of the world (excluding India): 12478370 Tons
PCBL Production Capacity: 571000 Tons
PCBL Sales in 2018-2019: 403000 Tons
PCBL Current Export: 95000 Tons
PCBL market penetration in International Markets: 0.76%

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North America Carbon Black Market
According to 2018 data, North America holds around 14% of global demand, which stands around
1900 kilo metric tons, and 14% of annual capacity, around 2338 kilo metric tons. This is expected
to grow at a CAGR of >4% in 2019-25 period.

Figure 6: Carbon Black Market Share by Volume, for North America

Figure 7: Carbon Black Market Share by Revenue, for North America

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USA Market:
USA is the largest producer of carbon black in North America. It is also the largest exporter of
carbon black in North America. Some of the major factors which favors the carbon black industry
in USA are favorable business conditions, huge automobile industry and increasing demand.
USA has a demand of around 1900 kilo metric tons of carbon black. Since it is the one of the
largest hubs of global automobile tire manufacturers, USA also is one of the largest consumers of
carbon black in world. In 2018, USA is a more than 2000 Million USD market, which is expected
to grow at a CAGR of 50.8%.
Leading players in USA are Cabot Corporation, Sid Richardson, Orion Engineered Carbons, Birla
Carbons. 60% of market is being captured by these top 5 players, among which Cabot Corporation
caters to most proportion.
PCBL presence in USA –
Carbon Black Demand in USA = 1900 kilo metric tones
PCBL supply in USA = 4800 metric tones
PCBL market share = 0.25%
This shows that PCBL has a huge opportunity and potential to increase its market share in USA
market.

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USA Tire Industry
Tire industry is the largest consumer of carbon black, and generates over 70% of total carbon black
demand. Looking at such huge proportion it becomes very important for us to analyze this industry.

Percentage of Demand

Tire Non-tire Rubber Non- Rubber

Figure 8: Carbon Black Demand, By application

Source: PCBL Annual Report

U.S. Automotive Tire Industry had generated a revenue of USD 57.9 Billion in 2018. It is expected
to rise at a CAGR of 5.4% in 2019-24. The United States is the largest consumer of tires in the
North American market. It is also the largest consumer of tires in the North American market. It
is also the second largest producer of automobiles.
The number of tire plants and expansion projects has increased in various parts of the United
States, with South Carolina garnering a significant share of investments. There is a continuous
competition for the small farm tire market share. This is a developing market especially on the
radial side. This is to be supported with new plants and facility upgrades in the United States and
Mexico. Additionally, with the increasing demand for lightweight vehicles and electronic vehicles
in the region, the demand for carbon black is expected to further increase during the forecast
period.
As estimated approx. 6 Billion USD will be invested in U.S. Tire Market in 2016-21.
There are around 30 tire manufacturing companies in USA. Out of which Michelin, Bridgestone
Corporation, The Goodyear Tire & Rubber Company and Cooper Tire & Rubber Company are
some leading market share holders.

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Also, many manufacturers like Triangle Tires and Nokian Tires are planning to expand their
manufacturing capacities in USA. This will certainly boost the production of tires in USA, and in
turn will increase the demand of carbon black in the market.
Moreover, quick adoption of technology and increasing demand of automobiles is continuously
boosting the growth of tire industry in USA.

Manufacturing locations of Tire Companies in USA

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SWOT Analysis

Figure 9: SWOT Analysis Model

• Strengths –
o 7th largest carbon black manufacturer in the world.
o Largest manufacturer and exporter of carbon black in India
o Presence in 37 countries
o Subsidiary of RPSG group
o Only carbon black company to have carbon credits
o Strong focus on R&D
• Weakness –
o No manufacturing plant in USA
o Limited presence in USA market
o Product portfolio is limited to rubber black and specialty black.
o Current USA partners not doing very well
• Opportunities –
o Expected increase in demand, after covid-19
o USA is the second largest consumer of carbon black.
o USA is the largest consumer of tire in North America
o Increase in demand of electric vehicles
o Planned investment in tire industry
• Threats –
o Impact of the Covid-19 global pandemic
o Increasing competition from low-cost carbon black manufacturers and global
players
o Stringent environmental regulations
o Silica as a reinforcing additive substitute in tire application
o The volatility of raw material price
o Increasing endurance life of tires due to advancement in technologies

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Porter’s Five Forces Model

Figure 10: Porter’s Five Forces Model

• Threat of New Entrants – LOW

o Large investment required
o Stringent rules and regulations
o High level of R&D required
o Quickness of developing marketing and distribution

• Bargaining Power of Suppliers – MODERATE

o Prices don not vary much among suppliers
o Product differentiation is challenging
o Many carbon black companies have backward integrated
o Supply of raw material is limited

• Threat of Substitutes – MODERATE

o Silica & Silicates could replace carbon black
o Cost of producing silica is high
o Easy to substitute
o Low cost of substitution
o In some countries, import price of silica is less

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• Bargaining Power of Buyers – HIGH
o A large number of available suppliers
o Price sensitivity of customers is high
o Customers rely on long term associations
o Easy to substitute

• Degree of Competition – HIGH

o Low manufacturers are entering market with new strategies
o Brand image affects market share
o Highly consolidated market
o High export-import of carbon black

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Product Strategy –
PCBL produces more than 60 grades of carbon black. Among them there are basically two
segments of carbon black. They are: Rubber Black & Specialty Black
• Rubber Black - PCBL produces 23 grades of carbon black. It offers a wide portfolio of
multiple grades as classified by American Society for Testing & Materials, and customized
and high-performance products.
PCBL produces rubber black under brand “Orient black”.
Company produces rubber black for applications such as:
Automobile Tires, Hoses, Conveyor Belts, Damping Elements, Shoe Soles, Mats, Tubing,
Air Springs, Molded goods, etc.

• Specialty Black – PCBL also produces various specialty black products. It is one of the
few companies in the world to meet stringent United States food & Drug Requirements for
direct/indirect food contact plastics applications such as trays and cutleries. PCBL aims 40
percent volume in Specialty and value-added carbons. PCBL manufactures specialty black
under registered trademark “Royale Black”.
PCBL basically has two brands in this category:
o Bleumina, which is a series of Medium/High colored black which give excellent
aesthetics to final product with high durability.
o NuTone, which is powdered carbon black for inks and coating segments
Various applications of specialty black:
Fibers, Wires & Cables, Geotextiles, Engineering Plastics, Adhesives, Inkjets, etc.

Some strategies which PCBL can follow to enhance its product portfolio:
• PCBL can increase its number of grades in rubber black segment. Its competitor Cabot
Corporation produces 53 grades of rubber carbon black.
• PCBL can start manufacturing end-of-life tires
• PCBL can focus on high quality rubber grades.
• PCBL can focus on other product segments such as aerogels, fumed metal oxides, activated
carbons, masterbatches and conducting compounds.
• PCBL can focus on enhancing mechanical properties of carbon black.

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Market Penetration Strategy
The key aim behind the strategy of market penetration is to launch a product, reach the market as
soon as possible and at last gain a substantial market share. Market penetration is sometimes used,
often as a metric to know whether or not a company is doing well on the market. Market
Penetration technique typically doesn't impact a company's overall marketing plan, but it always
carries with it a high growth opportunity and an improvement in revenue generation. A business
that is seeking to follow market expansion ideas must always continue to execute clear strategies
and techniques to counter the competition and raise sales figures. The technique is more widely
used whenever a business is selling prevailing products in an ongoing market.
Market Penetration Tactics
• Price Adjustment - Price Adjustment strategy is one of the most commonly used
strategies for market penetration. An example of market penetration may be reducing the
price of a good or service with a view to rising profits is a strategy of price change.
• Augmented Promotion - The drastic increase in product ( or service) marketing will lead
to dramatic results. For example, advertisement can be a great tool for raising awareness
about the brand. Companies do have a choice to make long-term or short-term campaigns
which depend on their needs and budget.
• Distribution Channels - Distribution Channels approach is one of the most successful
approaches for market penetration. This strategy typically involves opening new channels
of distribution by focusing on a particular channel of distribution.
• Improving Product - It's true that you have to boost the consistency of your goods to
really cater to your customers. Nonetheless, often talking with them about the product
itself's best quality will do the trick, and no significant product changes can be required.
That is because most customers are willing to buy a product only because of its
attractiveness and do not actually test whether or not it is proving itself. Thus you can
appeal more strongly and increase your sales revenue only by making minor changes with
the product and its packaging.
• Upsurge Usage - A very effective way of entering the market is to use that good or service
more. When a brand advertising strategy is implemented successfully in a particular region,
it will lead to an increase in product use, resulting in a greater penetration of the market
and an increase in revenue.
• Knowing Risk and Growth - Whenever marketers think about production, most think
about new launches. It is only partly accurate however. In reality it can also be dangerous.
When a new product is launched there is the possibility that it may or may not be through.
Yet, along with a smooth delivery process, an efficient distribution system ensures that the
product meets expectations.
• Create Barriers to Entry - When it comes to taking strategic choices, using the resources
of your company in a right and equitable manner is crucial. For example, you can improve
your profits by lowering your variable costs, and create a barrier for others to join. That's
why many businesses with superior technologies and distinct processes will slash variable
costs and gain higher gross margins per item sold.

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 • Be unique and think differently - You need to be more creative in your approach, and
extremely inventive. So, it'd be easier to think differently and change your penetration
techniques if and when necessary. Through making your goods more creative and adding
value you improve your chances of success.
• Diversification - The diversification tactics of product penetration involves producing new
products for new markets. Diversification strategy is usually followed when saturation
occurs in the current market, or when changes in the environment such as societal,
economic, technological or regulatory changes make it very difficult to generate new sales
in those markets.
• Strategic Alliances - For certain companies, reaching new markets is complicated due to
one or more factors. To overcome such a problem, many of these organizations are entering
into some form of strategic partnerships to compete in a single market with each other.
Advantages of Practicing Market Penetration Strategies
• Swift Growth
• Cost- effectiveness
• Contest Competitors
Disadvantages of Practicing Market Penetration Strategies
• Unachieved Production Costs
• Lack of Results

Ansoff Matrix
The Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior
managers, and marketers devise strategies for future growth.

Figure 11: Ansoff Matrix

Examples of Market Penetration Strategies

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 1. Cabot Corporation
• Availability of wide array of products.
• Complex supply chain
• Reliable suppliers and strong distribution network
• Mergers and acquisitions with several technical companies
• Innovation, Research and Development
2. Birla Carbon
• Expanding capacity of existing plants
• Increasing overseas markets business
3. Under Armour
• It has surpassed Adidas to become the number-two athletic-wear provider in the U.S.
• Fueled its growth by focusing largely on promotion, distribution, and consistent product.
• Known for its innovative and inspiring advertisements.
4. Starbucks
• Introduced new products into existing markets.
• Tried to reach every customer by increasing number of outlets.
• Diversified into related businesses.
PCBL, the largest producer of Carbon Black in India, have very low market share in USA. But the
company with such a great potential has a huge opportunity to grow in the market. PCBL can
define its penetration strategy and targets in short term, mid-term and long term.

SHORT TERM –
Currently PCBL have a very low engagement in USA market. As a kickstart strategy, PCBL can
divide the USA market into different segments, based on the competitors in that region, availability
of warehouses and distributors and the customers. Currently, there are more than 30 carbon black
manufacturers in USA, but the large portion of market is dominated by top 3-4 companies
including Cabot Corporation, Birla Carbon and Orion Carbon.
According to Mordor Intelligence Report, there is a demand of more than 2329- million- US dollar
worth carbon black which is expected to grow at a CAGR of 5.3%. This clearly depicts a huge
potential in the market.
There are more than 30 tire manufacturing companies in US. PCBL can segment these companies
based on the difference in available supply and demand, and can target the companies.
Also, most of the carbon manufacturers are situated in eastern and south eastern part of USA. So,
PCBL can also target those companies which are far from this region, and suffers a logistic issue.
MID TERM –
In the coming 1-2 years, post covid 19, it is very likely that market will witness a rise in automobile
demand. Therefore, there will be a huge demand of carbon black for rubber tires. USA being the

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second largest producer of automobiles in the world, and the world’s fourth largest exporter of
automobiles will be the perfect market to capitalize on.
Since post covid 19, there will also be demand of products with additional features. So, PCBL can
partner with the existing R&D centers in USA.
Also, PCBL can partner with logistics companies who can provide efficient warehouse capacities
and smooth distribution network to PCBL. PCBL can capitalize on the efficiencies of logistics
partner to provide a Just-in-Time delivery to customers.
It will be the time for PCBL, to also talk to the customers who were previously associated with
PCBL but have now left. PCBL can do a qualitative and quantitative analysis at that time to
understand the issues faced by them, and to rectify those issues. It can provide an initial discount
to get its previous customers back.
Also, to attract new customers, PCBL can increase distributors margin, can create some marketing
campaigns and can also provide some membership programs to maintain a long-term relationship
with the customers.
At this point of time, PCBL can also start providing customized services to its customers. It can
also produce products of different grades in order to cater a wide pool of customers. PCBL can
also attract customers in the name of quality product, more credit period, fast delivery, and discount
offers.
This is also the time, where PCBL also have to make sure that there is no shortage of carbon black,
and have to maintain the constant supply.

LONG TERM (after 3-4 years) -

In the long term, PCBL can understand its market position with preceding years’ efforts. With the
expected increase in global carbon black demand, at this point PCBL can try to capture a major
share of the market. PCBL can also establish its own logistics facility in USA, or can overtake an
existing logistics company.
Also, if the demand is very high, PCBL can also go forward by setting up a R&D Center and a
manufacturing facility in USA. This will help the company to cater to its customers in a more
efficient way, and will have more control over the market. Since, USA is second largest producer
of automobiles, and a larger number of tire companies have their manufacturing plants in USA, it
will be also be beneficial to establish in a market with such large chunk of customers.

Logistics Strategy

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A well-defined and effective Logistics Strategy is very important for sustaining in any market. The
efficiency of logistics directly affects the profits of the company in the market. In a market like
Carbon Black, it becomes even more important where the storage and distribution network are
very critical factors.
Currently, PCBL has two logistics partners in USA. One in Charleston, while the other is in
Baltimore. Currently PCBL have sales office in USA. It is catering to USA market through third-
party warehouses. However, the market share and supply percentage are considerably low. But
there is a huge scope for PCBL to expand in USA market. In order to expand in USA market,
logistics will be playing a very important role. This is because –
• Distribution of product is very important in case of exporting.
• It directly affects the cost, profit margin, and smoothness of supply chain in a huge way.
• Logistics will also be affected by the geography, topology and climate of market.
• Norms, rules and regulations related to logistics may be different for different markets.
They should be evaluated.
• To remain competitive, logistics of competitors should also be well evaluated.
• Certain factors like freight charges, rent costs, leasing costs, availability of transportation
services, etc. have to be evaluated.
There are few logistic strategies which PCBL can use in USA market-
• Owing or leasing warehouses – PCBL can setup its own warehouses or take them on
lease. Also it can set up its distribution facility or hire a third party.
Pros –
o Better control over the delivery process.
o Can chose strategic locations to set up the facility.
o Can easily meet the demand of customers.
o Can also partner with companies who do not have warehouse and distribution
facilities.
Cons –
o Locking of huge funds.
o Availability of warehouses at desired locations.
o Will become a liability in period of less demand.
• Hiring logistic services from a third party – There are many companies which provide
logistics to carbon black manufacturers in USA. PCBL can hire them.
Factors to be considered:
o Size of the third party.
o Competency and market coverage of third party
o Its market reputation
o Its financial status

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 o Its relations with the competitors
Pros –
o Relatively low cost as compared to owning.
o Can save cost in low demand period by releasing some facilities.
o Can easily switch locations in future, if required
o A core logistics company will be more competent in the process.
Cons –
o Company has to be reliable on a third party.
o In case of exporting, it becomes difficult to monitor the working of third party
service provider.
• Takeover a logistics provider company – PCBL can also take over a logistics provider
company.
Pros –
o In this way, PCBL will have a good control over the process.
o Can easily take advantage of logistic company’s competencies.
o Can give services to other carbon black manufacturers.
Cons –
o Involves a huge cost.

• Customer will be responsible for logistics – In this strategy, customer have to arrange
the transportation and warehousing on its own, once the product reaches the port.
Pros –
o No responsibility of logistics on the company.
o A huge cost will be saved
o Can provide product to customers in cheaper prices.
Cons –
o Competitor can take an advantage by providing on door supply facility.
o Less control over the market
o Customers may not prefer this process

Marketing Strategy
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Phillips Carbon Black Ltd. (PCBL), is currently following different marketing strategies in its
existing market. But since market strategies play a very important role for any company to survive
in a market. Marketing strategies may vary from one market to another due to several factors.
There to establish in USA market, it is very important to decide on a suitable and effective
marketing strategy.
For designing an effective marketing strategy, we should first understand the journey of a B2B
buyer.

Figure 12: Purchase Funnel

The B2B marketing tactics which were earlier used are not much relevant now, due to following
reasons-
• Since most of B2B buyers are millennials, so they hate cold calls.
• More people are involved in B2B purchase decisions. The typical buying group is
comprised of six to 10 members, and while 64% of C-suite executives have final signoff,
81% of non-C-suiters also have a say.
• The modern B2B buyer does their own research, frequently online.
• 90% of B2B buyers now twist and turn through the sales funnel, looping back and
repeating at least one or more task in the buyer’s journey.
A B2B marketing strategy should basically have three components –
• Demand Generation
• Lead Generation
• Retention and recovery
Steps in designing an efficient marketing strategy-
• Start with customer research – Understand the pain point of customers by talking to
customers.

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 • Conduct qualitative and quantitative analysis – Analyze the data collected to figure out
relevant outcomes.
• Establish key objectives and metrics – Ensure that the goals are specific, measurable,
achievable, relevant and time bound.
• Develop your B2B customer journey map.
• Identify executional marketing tactics
Phillips Carbon Black Ltd. (PCBL) can follow several marketing strategies to expand in USA
market. Some of them are:
• Suppliers and Distributors Marketing
• Trade Show Marketing
• B2B Referral Marketing
• Email Marketing
• Website
• Organic & Paid Search Marketing
However, all these marketing strategies are very generic for now. Let us now that deep dive into
each of them, and understand that what all PCBL can do in each of these strategies.
• Suppliers and Distributors Marketing – It is one of the most important marketing
strategies that PCBL should go for. Following are the things PCBL can do:
o PCBL can increase the profit margin for suppliers and distributors.
o PCBL can increase their credit period.
o Increase in credit period and profit margins can also be done on the basis of target
achievements. For example, if a supplier sales 5000 tons of carbon black, then he
will get a discount of 10%.
o Since, most of the suppliers as well as the suppliers are on the eastern coast of
USA, so PCBL can also categorize the suppliers and distributors on basis of
location, and make different policies.
o PCBL can provide other benefits like holiday trips, gifts, etc. if suppliers complete
their target.
o PCBL can organize parties for suppliers and distributors, where they can connect
and communicate the company well, also it will a nice way to make them feel
important.

• Trade Show Marketing – After this covid-19 scenario, trade shows might not be very
common. However, there will be platforms in near future where companies can come
together to display themselves digitally. PCBL should take part in such events. If not,
PCBL can itself organize such an online symposium where its customers (say, all tire
companies) can come together and display themselves. This will also give a potential
chance for PCBL to market themselves among their customers.
• Email Marketing – PCBL can divide its customers into segments, namely, existing
customers, new customers and customers who were previously associated with POCBL,

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 and can draft different email marketing strategies for them. For example, Email marketing
can be done more aggressively for new customers then existing customers.

• Cause and Purpose Association – After this covid-19 scenario, people will be more
sensitive about cause and purpose association of the company. PCBL is already doing
great in sustainability, and also is the first carbon black company of the world to receive
carbon credits. So, PCBL can capitalize on this and design campaigns related to some
cause.
Some of the ideas are:
o Campaigns related to local issues rising in USA, for example, Racism.
o Global issues, such as, environmental changes, global warming.
o Campaign for thanking its suppliers and distributors.
o Campaign for improving labor condition in industries.
o Campaign for customers, for example, #Thankyoutruckdrivers by Valvoline.

• B2B Review Sites – Since, most of the people seek for online reviews before buying
anything. So maintaining a good reputation on B2B review sites is a must. PCBL can do
this by explicitly asking customers for their reviews and by taking feedback time to time.
This will not only increase the credibility of the company on review sites, but will also
give insights to the company about what issues customers are facing.

Figure 13: Modern Online Buyer’s Journey

• Content Marketing – Today, most of the customers search online about potential
suppliers before buying any product. So, it is very important for any company to be among
the top suggestions of google. For now, PCBL is somewhat lacking in this for USA market.
So PCBL have to make relevant changes in the keywords and content on its website to be
among the top searches.

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• Social Media Marketing –
o PCBL can make its social media handles more active.
o PCBL can launch social media marketing campaigns.
o It can use various tools to increase its social media reach.
o PCBL can launch its Instagram handle.

Figure 14: Effectiveness Rating for B2B social Media Platforms

Figure 15: PCBL Facebook Page

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 Figure 16: PCBL LinkedIn Page

• Organic and Paid Search Marketing – As an aggressive approach, PCBL can on organic
and paid search marketing. By this, PCBL digital ads will be frequently on the relevant
webpages, and on the screen of people who are looking for similar or related products. This
will help the company in targeting the more potential customers and can increase the
conversion rate.

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Recommendations
• Penetrate market with short-term, mid-term and long-term strategies.
• Increase product portfolio, and focus on advance products.
• Develop long-term associations with distributors as well as customers.
• Focus more on online marketing.

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Bibliography
https://www.pcblltd.com/download/annual-report-2018-19/
https://www.mordorintelligence.com/industry-reports/carbon-black-market
https://www.grandviewresearch.com/industry-analysis/carbon-black-market
https://www.marketresearchfuture.com/reports/carbon-black-market-4701
https://www.industryarc.com/Report/18522/us-tire-market-research-report-analysis.html
https://www.ibisworld.com/united-states/market-research-reports/tire-manufacturing-industry/
https://www.statista.com/topics/3769/tire-market-in-the-us/
https://www.precisionmarketinggroup.com/b2b-manufacturing-marketing
https://en.wikipedia.org/wiki/List_of_tire_companies
https://www.ustires.org/

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