DELHI: Where do we go from here

Team The Council

TYRE INDUSTRY
• CEAT, the flagship company of the Rs 22,000-crore RPG
Enterprises, was Established in 1958.
• It is one of India’s leading tyre manufacturers and has
strong presence in global markets
SCOPE
• A healthy overall
PRICE SEGMENTS growth of 9-11% in
tyre demand in FY19
CURRENT SCENARIO • With rising prices
the customers tend • Demand from
• 16% of total car tyre to defer their tyre (OEMs) is expected
sales are generated purchase. to grow at 14-16% &
PERCEPTION in Delhi from replacement
• Unaware customer
• Truck tyre demand tyres at 6-8%
goes for cheaper
is expected to fall Chinese tyre rather • CAGR of 7-9% from
from current 40% to than the best tyre FY18-23
30% in 3 years for his/her car (CRISIL Research,18’)

Team: The Council International Management Institute, New Delhi

CEAT Tyres
Largest Population of Cars
16% of Total Car Tyre Sales in Open Market
Market Position
MRF Tyres> Others/Chinese > CEAT> Apollo > Bridgestone > JK >
Michelin > Yokohama
DELHI
Market Share
Passenger Car tyres- 20%
Truck Tyres- 40%
Status Quo Others- 40%

6 Territory Leaders
64 major dealers in Delhi
14 CEAT Shoppees

Current market share Delhi

CEAT 11% in car tyre sales

Avg. Monthly Sale Passenger car tyres in delhi is 17367

Team: The Council International Management Institute, New Delhi

CEAT Tyres

Problem To draw up a plan to grow the market share of CEAT tyres in

Statement Delhi to hit 13% by the end pf the financial year 2018-2019

Sales Target
Assuming CAGR of 7.1 % or monthly growth rate of .583% in domestic car sales growth in Delhi
Total Annual Car Tyre sales 1958119
@13% market share 254555
Sales in 5 months 86835
Expected Sales in 7 months 167720
monthly growth required 10.57%

Months Aug Sept Oct Nov Dec Jan Feb March Total
Ceat (targeted sales) 17367 19203 21232 23477 25958 28702 31736 35090 185398
Extra sales required 0 1836 2030 2244 2481 2744 3034 3354

Team: The Council International Management Institute, New Delhi

 Interpretations from the
CEAT Tyres Dealership Sales data

Categorisation of all Dealers into A, B & C Multi Branded Dealers

A B C Top multi branded Dealers selling CEAT and other brands

Exclusive Shopee Other Ceat Dealers Non-Ceat Dealers (Avg. Monthly Sales)
Name of Dealer Ceat MRF Bridgestone Apollo Chinese
Top 6 Poor 8 51 252
BhadraTyres 86 450 310 50 1620
No. of CEAT tyres sold 10034 1905 5428 0
Central Auto 400 200 0 80 1500
No. of CEAT tyres sold per dealer 1672 238 106 0
Mahesh Tyres 10 850 100 250 300
Quality Tyres 33 260 200 446 350
Gudi Tyres 29 260 200 450 440
Nehru Tyres 134 150 370 133 210
Total 692 2170 1180 1409 4420

Brand wise Dealerships

Brand-wise Total Franchisees + Dealers

Major Brands No.of Dealers Strategy
CEAT 64 A mix of franchise driven and dealership driven
MRF 99 Franchise driven
APOLLO 82
Chinese/Others 171 Dealership driven
Bridgestone 54

Team: The Council International Management Institute, New Delhi

CEAT Tyres Road-Map for 2018-2019

To achieve the targeted sales by 2018-19

There are 4 strategic plans for CEAT Tyres:

Action plan for Top 6 Exclusive shopee @10.57% monthly growth rate
Aug Sept Oct Nov Dec Jan Feb March
Plan A1 No. of CEAT tyres sold per dealer 1672 1879 2111 2372 2665 2995 3365 3781
No. of CEAT tyres sold by 8 such dealers 10034 11095 12267 13564 14998 16583 18336 20274
Extra sales to be achieved 0 1061 1173 1297 1434 1585 1753 1938

Action plan for poor 8 Exclusive shopees @15% monthly growth rate
Plan A2 Aug Sept Oct Nov Dec Jan Feb March
No. of CEAT tyres sold per dealer 238 274 315 362 416 479 551 633
No. of CEAT tyres sold by 8 such dealers 1905 2191 2519 2897 3332 3832 4406 5067
Extra sales to be achieved 0 286 329 378 435 500 575 661

Action plan for other Ceat dealers @ target rate of 12% monthly growth
Aug Sept Oct Nov Dec Jan Feb March
Plan B No. of CEAT tyres sold per dealer 106 119 134 150 167 188 210 235
No. of CEAT tyres sold by 51 such dealers 5428 6079 6809 7626 8541 9566 10714 12000
Extra sales to be achieved 0 651 730 817 915 1025 1148 1286

Projected Aug Sept Oct Nov Dec Jan Feb March

Result Total Extra Sales to be achieved from plan
A1,A2,B 1998 2231 2492 2783 3110 3475 3885

Team: The Council International Management Institute, New Delhi

CEAT Tyres
Dealer Feedback on CEAT from a CEAT Shoppe turned Multi-brand
Requirements Dealer
Supply chain proactivism in CEAT is relatively less
Product compared to Yokohama and MRF
Margin

Shortage of tyres , lack of tyre availability and higher

Superior Stock
Quality Availability lead time due to load arrival delay hamper CEAT sales

Passenger Sales Schemes promoted by other brands:

Car Tyre 1. Consumer Centric- offers/goodies/freebies to a
Assistance consumer who purchases a pair or a set of 4 tyres
from the Warranty 2. Dealer Centric- Foreign trip to Dealers on target
brand achievement as an incentive for proactive sales effort
Dealer
centric The subsidies and other incentives being given to
schemes
remain an exclusive CEAT subsidies dealer is not
effective.

Product Margin, Superior Quality and Stock Truck tyres share 40%of the value in dealership
Availability dictates the influence the Tyre brand revenue. CEAT can’t leverage on this in their exclusive
has on the Dealer. shoppees owing to less market share.

Multi-brand dealership is profitable ! Warranty Scheme of CEAT tyres is very attractive

1. Suited to an Indian Consumer who always look
for options
The Car tyres are competitively priced, but customer is
2. Leverage on the sale of truck and bus tyres
which bring in more value in sales revenue ready to spend extra amount for a superior foreign
branded tyre.
.
CASE COMPARISON WITH MRF TYRES

Brand Equity Prices on Website

MRF not only consists of a very strong value for the MRF not only displays features of different products
brand, but it also has the trust and the faith of the on their website, but also the price of it.
customers.

Strong Celebrity Endorsements XXxX

MRF tyres has sponsored cricket bats for many
legendary players like Sachin Tendulkar, Steve
Waugh and Brian Lara. MRF is endorsed by more
leading cricketers like Virat Kohli, AB de Villers and
Shikar Dhawan.
xxxx
Diversification
MRF is broadly diverse into three main parts, which
are, Funskool, MRF Racing and MRF Pace
Foundation
SALES STRATEGY FOR REVAMPING SALES HROUGH FRANCHISEE-SHIPS
TOP 6 CEAT SHOPPEES
Brand repositioning as CEAT Super Shoppees
• Enhanced shopping experience and different identity
01
GETTING SALE OF CEAT TYRES ONLINE
• Select your tyre online
• Check the availably in the store nearby.
• Grab the tyre at the best price
• Pay online
• Book an appointment in the store and collect the tyre
02
SUSTAINED CUSTOMER ENGAGEMENT
Customer Retention through tight post purchase follow
ups and loyalty programs
03
BOOK AN APPOINTMENT & PICK YOUR TYRE
Price and availability of tyre should be directly fed to a
customer who searches for a tyre online on the website.
Book an appointment option can make the franchise to
proactively stock a particular tyre in order/demand
POOR 8 CEAT SHOPPEES
Extensive marketing efforts to bring in more people
01
CREDIT FACILITY FOR TYRE PURCHASE
Credit facility for a minimum purchase (4 set of tyres) by
collaborating with any channel financing/finished goods
purchase financing partners
02
PROMOTIONAL OFFERS
Free services like free tire pressure check, air filling,
Happy hours wheel alignment cum wheel balancing
would attract more customers into the shop.
03
COLLABORATIONS WITH OIL COMPANIES
Collaborate with a leading oil brands to go for an
advertisement spree and CEAT sponsored Nitrogen
filling stations in in major petrol pumps .
SALES STRATEGY FOR REVAMPING SALES THROUGH DEALERSHIPS
PRODUCT
Product:
Superior quality product in
both performance and comfort
series
Product Development:
Performance series tyres for
the luxury segment-BMW,
Audi, Mercedes-Benz to create
a new brand recognition
Customer mind-set:
Indian customers are now
more sensitive to tyre
performance, sound and
safety unlike yesteryears
PROMOTION
Ads featuring the Product Differentiation:
Only tyre with 5 years manufacturing
defect warranty and unconditional
warranty up to 50% tread wear or 2 years
from date of manufacture.
Brand Association:
Association with a leading oil brands to go
for an advertisement spree and CEAT
sponsored Nitrogen filling stations in
major petrol pumps for better brand
Visibility.
Expos & Road Safety drives:
“Delhi Auto-Expo”, Automotive fairs and
Road Safety Drives like Buland Sitara are
big platforms for Media Traction brand
engagement with the public.
Social Media:
LinkedIn marketing for B2B segment
(Dealers & Franchisee-ships).
Facebook, Instagram, Twitter for mass
engagement.
Blogs:
User Experiences, customer
testimonials should be publicised for
customer engagement.
Building a new brand perception:
Magazines featuring product portfolio,
CEAT Dealerships and Franchisees,
future scope and innovation at CEAT
tyres would change the brand
perception gradually
SUMMARY
Increased Brand
value and
Revamped Sales

Customization

Integrated
Marketing
Communication

Indian Touch

Team: The Council International Management Institute, New Delhi

 TYRES

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