MADRAS RUBBER FACTORY

Vatsal Shah (K032)

Prakhar Sharma (K035)
Varun Singh (K036)
Dhananjay Thaker (K039)
Anuj Thakkar (K040)
Introduction
 Established in 1946, started as a toy balloon manufacturing company
 Started manufacturing of tread rubber in 1952
 Listed as a public company in 1961
 Established a partnership with Mansfield Tire & Rubber Company to
make tyres.
 Established an office in Lebanon in 1964, started exporting to US in
1967
 Current stock price is almost Rs. 70,000 per share
Products
Business Model
 Strong OEM presence
 MRF has its own sales channel: Supply is directly to the company and
to the stores
 Keeping the dealer network happy
 Strong brand image and connect
 No OEM presence in luxury car segment
 Weak digital media presence
Demand Cycle
SEGMENTATION
Macro-Segmentation
 It consists of identifying macro-variables on the basis of
industry or organizational characteristics.
 Type of Industry:
 Passenger Vehicles
 Cars
 Two wheelers
 Industrial Vehicles
 LCV
 MHCV
 HCV
 Others
 OTR (Over-the-road, earth movers)
 Farm vehicles (Tractors)
 Industrial vehicles (Forklifts)
Macro-Segmentation
 Type of Customer:
Macro-Segmentation
 Usage:
 Radial and bias
 Comfort, luxury, performance, SUVs
 Company Size:
 Franchises- 10-23L, 4000 sq ft
 OEM:
Micro-Segmentation
 It is the segmentation of the macro-segments into homogenous groups.
 Buying situation:
 New task
 Modified re-buy

 Straight re-buy

 Organizational capabilities:
 Technical support
 Financial support

 Services
Micro-Segmentation
 Purchasing policies (Extended Enterprise Approach):
 Centralized procurement
 Long term relationships with suppliers

 Supplier development and evaluation

 Procurement strategies
 Bidding
 Market based negotiated prices
 Turn-key contracts
 Service contracts
Micro-Segmentation
 Purchasing Criteria:
Nested Approach to Segmentation
TARGETING
Variables- Size and Growth

 Estimation of size of each market segment

 The current and future market potential can be obtained by using one or more
forecasting methods
 MRF identified that the three segments that is cars , 2-wheelers and trucks have a
sizeable market demand for their products and hence they decided to target all
these three segments.
Variables-Profitability Analysis
 Steps –
1. Identification of major selling and distribution activity
2. Conversion of natural expense to functional expense
3. Allocate functional expense to market segment
4. Preparation of profitability of each market segment
Variable- Competitive Analysis
 Analysis of already present companies in each segment is essential
before a decision is taken
 MRF was a late entrant into the radial tyre market
 However when MRF took the decision to enter the radial tyre market
it analysed the competition and concluded that their product can
compete with the competition in the market
 Today, it has succeeded in capturing a market share of 18% in the
passenger radial car tyre market and ranks second in the market
Target-Market Strategies
Differentiated Marketing
 Firm decides to target several market segments whose needs , product
usage or market response are appreciably different.
 MRF holds a diversified portfolio of products that span across the
entire tyre market.
 It manufactures tyres for all segments of the tyre market including
Passenger Vehicles, Commercial Vehicles, Farm Vehicles ad Off-The-
Road and Industrial Vehicles.
 This complete market coverage of its products has made MRF the
undisputed leader in the overall Indian tyre industry
POSITIONING
Establishing Category Membership

 Positioning Statement- Tyres with Muscle

 “Tyres we race, are the tyres you buy”
 The MRF mascot, the MRF muscleman, clearly states the category
membership MRF subscribes to.
 MRF communicates to the customer its superior endurance and strength.
Value Proposition
 MRF – Endurance guaranteed
 It stresses on the durability of its tyres on rough Indian roads
 Quality tyres that endure in the worst of conditions.
 Consequently, MRF offers a compelling value proposition to heavy
vehicle owners as well as passenger car and two-wheeler owners.
 It drives home this macho message through its mascot, the MRF
muscleman.
Competitors

Company Name
Net Sales Sales
(Rs. cr)
MRF 13,245.81
13%
Apollo Tyres 8,933.77
JK Tyre & Ind 5,979.12 4% 29%
Ceat 5,701.73
8%
Balkrishna Ind 3,731.49
TVS Srichakra 1,960.42
Goodyear 1,511.84 13%
Govind Rubber 205.36
20%
PTL Enterprises 50.00
13%
Krypton 33.36
Tirupati Tyres 7.26
Modi Rubber 5.15 MRF Tyres Apollo Tyres JK Tyre & Ind Ceat Balkrishna Ind TVS Srichakra Others

Source: www.moneycontrol.com
Basis of Points of Parity
 Quality
 Safety
 Durability
 Mileage
 Ride comfort
 Grip
 Cornering and Braking
Points of Difference
 High endurance tyres:
 Tyre consumers, especially heavy truck and bus owners
 MRF tyres to be the toughest in the market.
 MRF is amongst the top market leaders and in the heavy commercial vehicles
category
 High performance tyres:
 Clearleader in Two-wheeler market
 Image as a high endurance and high performance tyre
 Brand recognition and recall has also played an important role in its
emergence as the market leader
Perceptual Mapping High Price

MRF

Ceat
Apollo

JK
Low High
Performance Performance
TVS
Falcon Balkrishna
Industries

Low Price
GE Matrix
 GE-McKinsey nine-box matrix is a strategy tool that offers a
systematic approach for the multi business corporation to prioritize
its investments among its business units
 GE-McKinsey is a framework that evaluates business portfolio,
provides further strategic implications
 Y Axis- Industry attractiveness
 X axis- Strength of a Business Unit
GE McKinsey Matrix Investment Implications
GE Matrix for MRF
GE McKinsey Matrix- MRF

Tyres

Conveyor
Belt

Paints
What have they done to lead in the segments?
 First movers advantage

 Extensive Supplier network for replacement market

 Pull Marketing strategy

 Good R&D Initiatives for each segment

 Assured supply, Assured quality and JIT Supplies

What is the company doing to become leader in markets
they are not strong in?
 Building presence in Radial tyre market

 Building presence in Luxury Car market

 MRF to manufacture aviation tyres

 Tie-ups with competitive rallies and go-kart races

 Retreads- Recycling technique