A Dossier On
Prepared By:
Amarjeet Singh
Koushik Rakshit
Namita Pandey
Roma Agrawal
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A Dossier On MRF
1 Early history of the brand and its evolution over time
1.1 About the Brand MRF
MRF is a major player in manufacturing tyres, located in Chennai. The name is abbreviation of "Madras
Rubber Factory Limited". Main products of MRF are tyres, toys, Sports goods, Conveyor Belt, paints &
Coats. But MRF is mainly involved in making vehicle tyres. It is the largest tyre manufacturing company
not only in India but also worldwide. It exports to more than 65 countries. MRF tyres are manufactured in
six interdependent manufacturing units which built over 450acres and 15000 dedicated people. MRF
holds the highest market share of 22% in terms of sales volume in the tyre industry.
Few key attributes of MRF [Courtesy: Wikipedia]:
1.2 History of the brand and its evolution
MRF established in 1946 as a small toy balloon manufacturing unit at Tiruvottiyur, Chennai. In 1952 MRF
ventured into the manufacture of tread. The quality of the product was so high that by close 1956 MRF
had become the market leader with 50% share of the tread-rubber market in India. In 1961, MRF entered
into tyre manufacturing in collaboration with the Mansfield Tire & Rubber Company of USA .In 1963
Pandit Nehru cut the ribbon for Rubber Research Centre at Tiruvottiyur. In 1964 India tried to export its
tyres to overseas for the first time. The famous logo of MRF muscle man was born at this time only.
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Early history of the brand and its evolution over time MRF
By the end of 1964 it becomes the first Indian company which exported the tyre technology to US. In 1973
MRF introduced nylon passenger car tyres commercially. MRF made a turnover of 1 Billion Dollars.
Slowly they keep on increasing their factories in different cities of South of India and gaining the control
over market. In 1989 they collaborated with Hasbro International USA and launched Funskool India.
In 1989 they collaborated with Vapocure polyurethane paint formulations and with Pirelli for
MUSCLEFLEX Conveyor & Elevator Belting. In 1989 company first time come in support of cricket by
sponsoring tournament for Jawaharlal Nehru trophy. In 1990 won a boxing championship. The logos on
jersey of player gave them a huge medium of marketing and popularity. In 1997 MRF entered into F3 car
industry.
MRF launched ZSLK tyres – the first eco friendly tyre. MRF commissioned its seventh Plant at Ankanpally
(A.P) in 2011.It won the JD power award for the 10th time. MRF's Aero Muscle becomes the only Indian
tyre to be chosen for the legendary fighter jet - Sukhoi 30 MKI in 2013 and the history continues…
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Initial positioning and subsequent repositioning MRF
2 Initial positioning and subsequent repositioning
2.1 Product Positioning
Positioning is defined as the way by which the marketers attempt to create a distinct impression in the
customer's mind. Being a homogenous product there is not much difference in products offered by
competing tyre manufacturer. Still MRF has tried to focus on High Quality, High Endurance, Brand
Loyalty and Stronghold in the replacement. MRF communicates to the customer its superior
endurance and strength. The company sponsors a number of sports such as cricket and rally racing, to
position its tyres as high endurance and sporty. It has framed a slogan “Tyres we race, are the tyres
you buy” stands testimony to their category membership.
Tyre with Muscles Logo
2013 MRF Challenge
Cricket Kit
Their positioning statement: “Tyre with muscles”
2.2 Positioning Strategy
MRF has always tried to differentiate them by doing different kind of experiments. In case of tyres they
have tried to maintain some Points of Parity, such as quality, safety; tread design, economy etc. MRF
tyres use benefit positioning in which they basically talk about functional benefit of the tyre by stressing
upon high quality, stability, long life, replacement. They ensure every customer gets best product (tyres)
for their vehicle. MRF believes in providing best to its customers:
Core Value: “Delivering high quality products to the customers”
Emotional Benefit: “Enjoying safe and comfortable driving”
Functional Benefit: “Stability, Long life, High Performance”
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Initial positioning and subsequent repositioning MRF
3 Advertising, Sales promotion and Segmentation strategy followed
3 . 1 Advertising
MRF uses advertising world very innovatively. They invests heavily on print, TV and outdoor media, to
drive its brand into the minds of the customer. MRF is known for designing some of the most creative ads
ever made for an Indian tyre company. Its mascot, the MRF muscleman along with its slogan “Tyres with
muscle” was once one of the most recognizable advertising campaigns in advertising history. MRF takes
care to promote its tyres as tough, reliable and high endurance by contributing into many sports, rallies
and products like cricket bat. To reach to the ground level Indian customers, MRF has chosen most
famous sport in India to sponsor. It has chosen below stars as their brand ambassadors:
Also, we all know about the MRF pace foundation which is a coaching clinic for training fast bowlers from
all over the world. This was created by MRF Limited with the help of former Australian legendary fast
bowler Dennis Lillee. [Courtesy: Wikipedia]
MRF ZVTS is positioned as the "Most Comfortable Radial". The position has been consistent in the
entire 14 year history of the brand. In the initial years, the brand was endorsed by Sachin Tendulkar. The
brand used the imagery of a small child enjoying the drive, car floating in the air etc. This imagery has
been consistent in the brand's communication and has effectively communicated the positioning clearly to
the consumers.
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Advertising, Sales promotion and Segmentation strategy followed MRF
3.2 Sales Promotion
Replacement Strategy: Tyres are responsible for many factors such as dependability, brake handling,
safety and mileage of your vehicle. The warranty of MRF tyres is given for 3 years against manufacturing
defect and they promise for replacement in this scenario. The replacement strategy helps in attracting
more number of customers.
MRF introduces festival offers, consumer discounts and other sops through its dealer outlets. These
offers to customers are called sell out schemes to give its customers a unique experience while shopping
tyres for their vehicles.
3.3 Segmentation
In tyre Industry there is not much interaction between the company and the customers. Tyre companies
mostly sell to dealers in replacement market and OEM‟s. Therefore market segmentation for the tyre
Industry is based on type of vehicle served rather than the individual customer.
Below tree shows the division based on type of vehicle:
The major categories for which MRF produces tyres are mentioned below:
1. Heavy duty truck/bus
2. Light truck
3. MUV/RCV/passenger car
4. Motor sports
5. OTR
6. Military service
7. Farm service
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Advertising, Sales promotion and Segmentation strategy followed MRF
8. Fork lift
9. Two/three – wheeler
MRF manufactures tyres for all segment of the tyre market including passenger vehicle, commercial
vehicle, Farm vehicle, Industrial vehicle. The complete market coverage of its product has MRF
undisputed leader in the overall Indian tyre Industry. Below table shows the target customers and purpose
of MRF on a broader level:
PRODUCT
TARGET
PURPOSE
Passengers Cars
Middle Income Family
Low income family, and
bikers
Durable, Excellent mileage
Sharp Cornering capability, wet traction and
better steering
Truck Drivers
Better road grip and improved traction
Cargo
Farmers
Cooler running and wheel fitment
Farm and haulage design, Self cleaning property
Two Wheelers
Heavy Commercial
Vehicle
Light Commercial
Vehicle
Farm Vehicle
4 Analysis of product and generic competition to the brand
4.1 Products of MRF
MRF produces many types of tyres. Each type has many sub-types as well. All the types and sub-types
have unique tread design; they have given for the specific purpose. Some of the popular tyres are and the
common feature possess by each type are as follows:
1. Heavy Duty Truck/Bus Tyres:
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Analysis of product and generic competition to the brand MRF
This tyre is very strong and durable that as this is used in heavy vehicles. This makes vehicle in better
road grip and also increases the mileage of the vehicle
2. Light Truck Tyres:
This is also very strong and durable. It also helps in increasing mileage. But its extra strong casing (the
middle design) makes it provide a better grip on high roads.
3. MUV/RCV/Passenger Car Tyres:
This is used by ultra light truck category. Extra strong casing is provided by MRF to these tyres so that
driving becomes extra smooth, extra safe. This give a great support to driver on the wet road, it prevents
from skidding.
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Analysis of product and generic competition to the brand MRF
4. Tyre for Motor Sports:
These are designed with asymmetric pattern (both ends of tyres on circumference will be different) and
reinforced side walls makes it puncture resistant. Large gaps in casing provides extra grip in wet mud and
on hard dry gravelly land.
5. Farm Services:
These have knife action type‟s lugs which help them in better penetration and cleanability. These are very
rigid, cut free and have very long lasting life. MRF produces different types of front and rear tyres of this
variety named as Shakti Front and Shakti Rear with unique specification.
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Analysis of product and generic competition to the brand MRF
6. Military services:
These are designed as per their usage. They have high voids so that they can easily run on soft and
sandy terrain. They are high weather resistant. One of this category named as “sand master” have almost
plain design to make them run on plain surface.
7. Fork Lift:
These have aggressive pattern which provides optimum ride comfort, grip and life-comfort balance. They
are just maintenance free.
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Analysis of product and generic competition to the brand MRF
8. Two/three wheeler:
This type has variety of features. The common features possess by all sub-types are good and wet
traction, better steering, provide good mileage and better grip.
9. Off the road/earth Movers:
These have excellent pulling power in both the directions (forward and backward), have strong and bruise
resistant, heat has no effect on this type. This type is measure of strength.
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Analysis of product and generic competition to the brand MRF
4.2 Competitors
MRF is giving tough competition to its peer brands. Below table clearly shows that, MRF is much ahead of
all of them. [Courtesy: Money Control (data collected based on share price on 24/07/2014)]
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Analysis of product and generic competition to the brand MRF
4.3 Market Comparison among few Competitors
Below is the pie chart showing the net profit of MRF and its other competitors for last 1 year.
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Analysis of product and generic competition to the brand MRF
MRF Continues to rule the Indian Tyre Market clearly shown by above data
[Courtesy: Money Control (data collected based on share price on 26/07/2014)]
The global tyre market is expected to reach $187 billion in the next five years; an expected compounded
annual growth rate (CAGR) of 4%. The Indian tyre industry, which accounts for about 5% of demand
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Analysis of product and generic competition to the brand MRF
worldwide, is dominated by key players, such as MRF, Apollo, CEAT, JK, Goodyear, Bridgestone, TVS
etc
4.4 Basis of Competition
Tyre is something which is very homogeneous, there might be very slight difference based on brands.
Below are some of the points that consumers follows while selecting a tyre and that forms the basis of
competition:
1.
2.
3.
4.
5.
Tyres for sports vehicles
Which brand affects the mileage of the vehicle
Price is the one that matter with the quality of the product
Durability of the tyres.
Grip during the rainy and monsoon seasons.
5 Strategies adopted over time by the brand to tackle competition or prime market
expansion
MRF undoubtedly has made an appreciable global presence and to keep the presence intact they have
constantly moved with the time to deliver their best. Being an Indian company they understand the value
of money from the perspective of an Indian mindset. They adopted some strategies over the time in order
to tackle competition from peers like Bridgestone, Apollo, CEAT, TVS etc.
 Unlike Bridgestone and Apollo who focuses only on four-wheelers, MRF has paid attention to the
needs of two-wheelers, heavy-duty trucks which helped them to gain customers‟ confidence. When
customers of this category were getting quality tires from MRF at an affordable price, other
competitors in these categories were absent at that time. This made people brand loyal to MRF.
 In the year 1989, MRF grew in recognition by means of collaboration. As a result it offered the
customer a great new experience by opening “MRF Tiredrome”, India‟s first Tire Company owned
wheel care complex at Madras.
 The next strategy they adopted was the opening of T&S (Tires and Sales) store in the country.
Designed like a modern store with all creature comforts, T&S stocks the entire range of MRF tires
and employ company trained technicians to provide the entire gamut of tire and wheel related
services that the owners of modern cars require.
 Their participation in the ARPC rallies in 2001-05 and victories in the same, made them more
visible.
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Strategies adopted over time by the brand to tackle competition or prime market expansion MRF
 They not only pleased humans but mother nature as well by making Eco-friendly tires: ZSLK tires
in the year 2007.
 MRF‟s strategies were not limited only to the grounds, because MRF‟s Aero Muscle became the
only Indian tire that was chosen for the fighter jet SUKHOI 30MKI.
 MRF‟s strong presence in the replacement tire market has allowed it to cope better than rivals with
the slowdown in the Indian automotive industry.
 In MRF Pretreads System, to ensure high quality MRF pre-cured the tread rubber first in MRF‟s
factory then uses them. Today, MRF have expertise for this and are emerged as Mileage leader.
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Strategies adopted over time by the brand to tackle competition or prime market expansion MRF
 MRF has a strong brand loyalty in the replacement market and it gets three-fourth of its revenue
from the replacement market that is more profitable.
 MRF also puts a lot of stress when it comes to advertising. During the last fiscal year ending
September 2012, MRF spend Rs 120 crore on advertisements whereas in case of Apollo tires it
shrunk from Rs 154 crore in FY09 to Rs 95 crore in FY13.
 Advertising through the medium of sports specially cricket is another effective way to reach the
mass. Some of the sports person who was a part of this idea is Sachin Tendulkar, Brian Lara, Virat
Kohli, Shikhar Dhawan etc.
By adopting all these strategies, MRF managed to be one of the bullish shares in last 5 years.
[Courtesy: Money control]
6 Distribution strategy followed by the brand
Skimming strategy: Selling a product at a high price, sacrificing high sales to gain a high profit, therefore
„skimming‟ the market. Usually employed to reimburse the cost of investment of the original research into
the product.
Penetration strategy: The price is deliberately set at low level to gain customer's interest and
establishing a foot-hold in the market.
Distribution Strategy: MRF has one of the largest tyre distribution channels in India. It has divided the
Indian subcontinent into 33 regions and has setup a Regional office in each region. MRF has three level
distribution structures.
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Distribution strategy followed by the brand MRF
The basic structure comprises of the following:
1. Factory: The factory supplies goods to the RDCs (Regional Distribution Centers) and from these
RDCs the goods are transferred to CFAs (Carrying and Forwarding Agents).MRF has
manufacturing units at following locations:
1) Tiruvottiyur, Chennai
2) Kottayam, Kerala
3) Usgao, Goa
4) Arakkonam , Tamil Nadu
5) Medak , Andhra Pradesh
6) Pondicherry
2. Divisional Distribution Centers: The DDC (Divisional Distribution Centre) is used for Storage and
Assembly of tyres, Tubes and Flaps from the plant.
3. Regional Distribution Centers: MRF has divided Indian subcontinent into 33 regions and set up a
Regional Office for each region.
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Distribution strategy followed by the brand MRF
4. Carrying & Forwarding Agents: These acts as depots/warehouses for distribution to the dealers.
Carrying and forwarding agents (C&FAs) are attached to them. Often the larger regions have 2 or3
or more C&FA‟s to cover the region properly.
5. Dealers
6. Over 2500 sales outlets all over India
7. Over millions of customers in India as well as in foreign.
6.1 Export to Overseas
It was a very challenging year for MRF with the global markets showing very clear signs of a slowdown
resulting in over supply and prices going on a downward spiral. MRF had overall supply issues more in
terms of strategically servicing the continuing domestic after-market demand and deciding to maintain the
excess volumes in the line with the previous years. In spite of these factors, export revenues posted a
nominal growth of 1% over the previous year. MRF was awarded the “Highest Export Award [Auto Tyre
Sector]” by All India Rubber Industries Association yet another time during the period under review.
7 Summary regarding the future directions for the brand
MRF already has a huge customer base worldwide. It should ensure customers by guaranteeing them
that their products and services (Tyres, Funskool and pace foundation) are designed to fight with Indian
weathers and roads. However, MRF‟s promotional strategy should focus more on the need of the Heavy
duty truck and bus driver. This is mainly because a majority of its sales comes from Heavy and Light
Commercial Vehicles. The Indian driver measures this value for money in many ways:
 through improved mileage,
 lower maintenance cost,
 improved safety,
 higher average life,
 and improved drive comfort
They have to make changes in their promotion platform. That is the kind of strategizing that keeps a brand
alive in today‟s competitive.
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Summary regarding the future directions for the brand MRF
8 References
Data and Information Collected from following references:
1.
2.
3.
4.
http://en.wikipedia.org/wiki/MRF_Limited
http://www.mrftyres.com
http://www.moneycontrol.com/competition/mrf/comparison/MRF
http://www.thehindu.com/sport/cricket/gambhir-named-mrfs-brand-ambassador/article15135.ece
5. www.scribd.com/
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References MRF