The document provides an overview of the Indian tyre industry and a case study on Zen India Pvt Ltd., a tyre manufacturer. It discusses Zen's product launch in the 1990s, current market share and segmentation. Though Zen was an early introducer of radial tyres, it faced challenges in the replacement market due to price sensitivity and lack of promotion. A SWOT analysis identified strengths in mileage but weaknesses in awareness. The case concludes with recommendations around reducing costs, convincing OEMs, and improving after-sales service.

1. DATE:- 20th DEC 2011

2. .

3.  Case developed by Dr.Rajan
Saxena ,
Chair professor of marketing and
general management.
- Narsee Monjee Institute Of
Management Studies [ NMIMS
],Mumbai.

4. Tyre industry overview 2010-11
Est. Turnover of Indian tyre industry Rs 30,000 crores
Tyre production (tonne) 14.88 lacs
Production All categories (NOS.) 1192 lacs
tyres
Export from India Rs. 3600 crores
Number of tyre industries 39
Radialisation level- current (as a % of total tyre production)
Passenger car tyres 98%
Light commercial vehicles (LCV) 18%
Heavy vehicles (trucks & buses) 15%

5. TOTAL TYRE PRODUCTION IN INDIA
(In 000
Nos.)
2004 - 2005 - 2006 - 2007 - 2008 - 2009 - 2010 -
CATEGORY
05 06 07 08 09 10 11
Truck &
11092 11941 12367 13137 12839 14811 15668
Bus
Passenger
11862 13605 14264 16437 16571 20047 26201
Car
Jeep 1462 1272 1368 1467 1469 1402 1500
(L.C.V.) 3945 4529 4820 5320 5298 5739 6029
Scooter 9992 9519 9643 11604 10882 13558 20140
Motor
18127 21053 26079 27921 30148 35664 43118
Cycle
Industrial 377 514 635 733 568 538 616
TOTAL 60082 66032 73545 81103 82107 97137 119197

7. Market share of different tyres industry as
per 2009-2010

8. Introduction – Zen India Pvt Ltd.
 Name- Zen India Pvt. Ltd.
 Year of establishment - 1990
 Vice president- Mr. Suresh Mohnot
 General manager- Mr. Srinivasan.
 Product manager- Mr.Pradeep
Srivastava
 Sales manager- Mr. Jaspal Singh

9. Company structure:
 The company started in 1990,
 When it launched the state of the art
radial tyres. These tyres were used all
over the world and the company
thought of taking the advantage of this
better feature packed tyres in india.
 Zen was among the first few
companies to introduce radial tyres in
india in 1990’s.

10. What are ZEN microgrip
tyres ?
 It is a state of the art tyre that
provides the vehicle driver a firm
road grip, excellent braking ,
stability, smooth ride & longer life.
Having a steel belt around the
radial ply nylon carcass.

11. Advantages of ZEN microgrip tyre over
others:-
 Flexible sidewalls
 Reduced fuel consumption due to less
rolling resistance
 A softer ride because of the layout of
the tire's plies and because of the flex
of the sidewalls, assuring more stable
contact with the road service and a
softer ride
 Less vibration
 Extended tire life due to less heat
generated by the tire

12. Market Classifications:-
 The tyre market is divided into 3 segments:-
1) Passenger car vehicles- The potential
customers
2) LCV (light commercial vehicles)
3) The two wheelers.
 The market for all these 3 type of buyers can be:-
1) The replacement market,
2) The OEM (original equipment manufacturer)
3) And the export market.
 Microgrip had done well in the export area but
there were serious issues in the replacement and
the OEM markets.

13. Supply of tyres to various segment like replacement market,
oems, export.

14. Situational analysis:
 The automobile industry was growing at the
rate of 25% and the economy was also moving
along at 6.5 %, but Microgrip has not been
able to show the same kind of results.
 In1992, Zen put up a manufacturing unit of
30,000 tyre capacity per month and targeyed
to sell 10,000 in each segment [replacement,
OEM, and exports].
 Although they were able to sell 30000 tyres,
the graph showed a different analysis. It sold
15000 tyres in exports,10000 in OEMs and
only 5000 in replacement market.

15. Hurdles :-
 Zen Microgrip could not take the first mover
advantage in this case as they lacked some
basic promotional and product awareness
skills.
 They did not promote the product that well,
there were no informative campaigns to
make the user aware of the benefits of the
radial tyres over the conventional nylon
tyres.
 The company did not pass on the
information to the dealers and they were left
alone to use their own push tactics, which
finally did not work

16. Problems in replacement market:-
 The basic problem in the LCV replacement
market is that the customers are very price
sensitive.
 The radial tyres are costing Rs. 4000
compared to the cost of conventional tyres
that is Rs. 3000.
 Also the tractor trailer tyre came in same size
and was interchangeable, many of the
customers preferred to use them as they
were cheaper and also provided tax benefits.
 The Indian customers are used to loading
their vehicles, which adds on to the extra load
per tyre. In reference to the LCV market,
there were only a handful rivals to Zen.

17. SWOT Analysis:
Strengths Weakness Opportunities Threats
More mileage Lack of promotion Market research Competition
 Strength Weakness: from other
brands
Low fuel Unawareness Understanding High
consumption of the product to customers comparative
consumer preferences Cost
Steel belt Price factor Chance of Market trust
holding creating
monopoly
Superb breaking Replacement Lower profit=high Failing of
factor sales strategies
Long life-savings High cost Increase If sidewall
promotion budget bulges it cause
puncture.
Powerful road Creat
grip associations,
Partnership
Smoother, Shift in OEMs

18. 4 P’s
 Product :- Microgrip radial tyres
 Place:- Indian market
 Price:- Rs.4000 per tyre.
 Promotion:-
 Initially company did soft launch but could not
achieve expected results.
 Relaunch- to promote the brand, the company launched
an advertising and sales promotion campaign.
The brand was positioned on the conventional features
benefit platform.
The company made a punchline in there advertisement as
“Drive home safely on Microgrip”
 and “More miles at lower cost with Microgrip” .

19. STPD:-
 Segmentation
 Targeting
 Positioning
 Distributing
Segmentation:-
1. Light commercial vehicles
2. Passenger car segment
3. Two wheeler market

20. Contd..
 Targeting:-
1. Replacement market
2. OEM
3. Export market.
 Positioning:-
1. Indian market mainly at south west
market and
2. Export market
3. Positioning strategy was based on rational
motive of the cost-benefit ratio or the
concept of economic value.
 Distributing:-

21. Demand projections of car tyres:-
Particulars 1995-96 1996-97 2000-01
Replacement 1587 1653 2047
potential
OE potential 1319 1430 2029
Others 5 5 5 0
Total domestic
potential
Export potential 55 60 70
Total projection 2966 3156 4152

22. Demand projections of light
commercial vehicles tyres :-
Particulars 1995-96 1996-97 2000-01
Replacement 939 1073 1665
potential
OE potential 595 682 1184
Others 5 14 14 0
Total domestic
potential
Export potential 64 71 104
Total projection 1612 1840 2967

23. Demand projections of utility
vehicles tyres:-
Particulars 1995-96 1996-97 2000-01
Replacement 626 672 944.48
potential
OE potential 279 318 538
Others 5 10 10 0
Export potential 0 0 0
Total projection 918 1000 149

24. Conclusion:
o The company should have reduced the
cost of tyres to attract the price sensitive
customers and to do this they have to
segregate their product in 2 brands.
o In this way they can attract the customers
that are ready to pay a little extra or
almost the same price as the conventional
tyres and get the added benefits that is
offered by radial tyres.
o Zen also has to convince the OEMs to
supply radial tyres as factory fitted tyres.

25. Contd…
o Once the OEMs start using radial tyres the
demand for them would eventually
increase to two folds or more.
o Zen has to offer after sales service to the
customers and provide continuous
discussion agendas as to how to improve
on the product to suit their demand.

26. Bibliography

 www.wikipedia.com
 www.google.com
 http://www.michelinag.com