Ceat tyre summer intership report for Penetration in the market & Set up New distribution channel, Finding New Point of sales

BRAJENDRA SHARMA ( SIP REPORT IN CEAT TYRE)

GHS IMR KANPUR www.ghsimr.org

FACULTY GUIDE COMPANY GUIDE Prof. Suneel Gupta Mr. Ritu Raj(Associate professor) ZBM CEAT TYRE (U.P)

GHS-IMR

mailto:[email protected]

CEAT TYRESCeat Ltd, a part of the RPG Goenka group, is the second largest tyre manufacturer in the country after MRF. Ceat manufactures truck & bus, passenger car, scooter and LCV tyres. The company is a dominant player in the truck & bus and passenger car tyre segments with a market share of 14% and 17% respectively

In 1958, CEAT came to India, and CEAT Tyres of India Ltd was established in collaboration with the TATA Group

In 1982, the RPG Group took over CEAT Tyres of India, and in 1990, renamed the company CEAT Ltd.

Over 6 million tyres produced every year , Exports to USA, Africa, America, Australia and other parts of Asia Network of 36 regional offices, over 3,500 dealers and more than 100 C&F agents

NEED OF THE PROJECT

The Ceat has introduced a new PLant located near Halol, Gujarat & It would roll out by May 2010. Expected Production is 4 mn tyres in Phase 1, while its capacity will

Increase to 12 mn in the next 10 years.

Joining of the Project = 03/05/10

• AIM OF THE PROJECT--------

Finding New Point of sale and Proposed a New Distribution Channel in Rural/Urban Area’s For the CEAT TYRES in U.P.

OBJECTIVES OF THE STUDY• 1. POTENTIAL AREA-----COVERED AREA-----EXSITING POPULATION-------POTENTIAL OF

TWO WHEELERS TYRE MARKET----POTENTIAL MARKET FOR CEAT----NEW POS FOR CEAT

• 2. FINDING COMPETITORS (MRF, TVS, APPOLO, BIRLA, J.K.TYRES )---MARKET STRATEGY—DISTRIBUTION NETWORK—PRICING—PRODUCT RANGE

• 3. AVAILABLE PRODUCT RANGE---NEW RANGE IN DEMAND

• 4 . POTENTIAL AREAS FOR THE NEW DISTRIBUTORS

ACTION PLAN• TARGET LOCATIONS - Petrol Pumps, Auto Parts Shops , Service Centre

in Rural & Urban Areas.• Collection of data from dealers / distributors for measuring which areas

have more demand and which have less demand.• Collection of data from Auto Parts Shops / Service Centre , to find that

their monthly demand gets fulfilled or not and from which areas they Purchase Tyres for Measuring Existing Distribution Network

• Collection of Data from Petrol Pumps ,they Interested or not for selling tyres if CEAT Provide Tyres

• THE DATA WE COLLECTED WAS THROUGH QUESTIONNAIRE.

Survey form for Bike Owners

a. Name of respondent : b. Mob no : c. Age : 18-25 25-30 30-35 35-40 >40 d. d. Income (monthly basis)

5,000-10,000 10,000-15,000 15,000-20,000 20,000-25,000 25000+

1. Do you visit this petrol pump regularly?

Yes No

2. If yes, then how often? >=3 times a week 2 times a week <Once a week

3. How do you perceive the quality of fuel at this pump?

a. Very reliable b. Can be improved c. Don’t trust 4. Is your home/office near to this pump?

Yes No 5. How far is the above? (range in kms)

1-3 km 3-5 km 5-7 km >7 km 6. What all services at this pump do you use?

1. Only petrol 2. Petrol and air 3. Puncture and small repairs 4. Servicing 5. Spare parts

7. Which branded tyre company would you choose for your next tyre?

MRF CEAT J.K.TYRE DUNLOP TVS

8. Where do you like to purchase tyre for your bike ?

a. Autoparts shops b. Branded Stores/Dealers c. Service centres

9. If CEAT tyres are made available at this POS, would you like to get it from here?

Yes No

10. What do you see when you go for purchasing tyres ?

a. Quality b. Service c. Price d. Brand

11. In terms of service how much are you willing to travel ?

a. Should be very close b. Some distance c. Any distance

Survey form for Owner/Manager of Petrol Pump

a. NAME OF THE PETROL PUMP : b. ADDRESS : c. OWNER’S NAME : d. MOB NO :

1. HOW MANY TWO WHEELERS COME DAILY

50-100 100-200 200-400 400-600 600-800

800-1000 1000+

2. HOW MANY SERVICES YOU PROVIDE ALONG WITH PETROLEUM

ONLY PETROL

AIR CHEKING

REPAIRING & SPARES

OTHER SERVICES (SERVICING ETC.)

3. WHAT YOU THINK IF YOU START SELLING TYRES TOO

VERY INTERESTED CAN THINK ABOUT IT NOT INTERESTED

4. IF CEAT PROVIDE YOU WITH TYRES, WOULD LIKE TO START SELLING TYRES

YES NO

Survey form for Owner/Manager of Spare Parts Shop

a. NAME OF THE SHOP : b. ADDRESS : c. OWNER’S NAME : d. MOB NO :

1. Do you sell tyres or not?

Yes No

2. In a month, how many tyres do you sell on an average ?

a. 50-100 b. 100-200 c. 200-300 d. 300-400 e. 400+

3. Is the supply of tyres to you sufficient?

Yes No

4. How many tyres can you sell per month? a. 50-100 b. 100-200 c. 200-300 d. 300-400 e. 400+

5. Tyre Sales Pattern

Primary Sales% Secondary Sales%

6. HOW YOU PURCHASE TYRES

____________________________________________________________

7. Would you be interested to receive tyres directly from C&F instead of _________________

8. HOW YOU CATEGORISE TYRE (A-E)

CEAT MRF J.K.TYRES DUNLOP

9. What is your preference if you choose a to sell a brand of tyre ?

AVAIBILITY MARGIN SERVICE PRICE

Field work

ETAWAH 1. (Route----Etawah—Bharthna—Bakewar-) ( 70 KM )2. Route—Ajitmal---Baburpur---- Maheva—Bakewar—Lakhna--- ( 80 KM)3. Etawah----Mainpuri------Karhal---- Saifai------Etawah (148 KM )4. Etawah---Jaswant Nagar----Etawah------Ekdil---- Local Etawah City ( 66 KM )

BAREILLY5. Bareilly-----Milak----Kemari----Bilaspur— Bhota---Rampur------Bareilly (130

K.M.)6. Bareilly-----Binavar-----Badaun----- Bareilly---(DISTANCE-68 K.M.)7. Bareilly---Nawab Ganj---Pilibhit---Bareilly (126 K.M.)8. Bareilly Local

FATEHPUR Khaga – Bindki –Jahanabad --Fatehpur

DATA ANALYSIS OF THE BIKE RIDERS &PETROL PUMPS OWNERS

Which age group comes more on petrol pumps

35.7 %

28.7 %

14.8 %

4.3 %

16.5 %

No of responded = 115

Quality of fuel at the petrol pump

Frequency PercentValid

PercentCumulative

PercentValid very

reliable 71 61.7 61.7 61.7

can be improved 29 25.2 25.2 87.0

don't trust

15 13.0 13.0 100.0

Total

115 100.0 100.0

Reliability of bike riders on petrol pumps

61.7 %

25.2 %

13 %


Next tyres choice


PercentCumulative

PercentValid mrf

67 58.3 58.3 58.3

ceat19 16.5 16.5 74.8

j,k.tyres20 17.4 17.4 92.2

dunlop7 6.1 6.1 98.3

tvs2 1.7 1.7 100.0

Total115 100.0 100.0

Next tyres choice (market share of CEAT)

58.3 %

16.5 %

17.4 %

6.1 % 1.7 %


RESEARCH METHOLOGY(CHI-SQUARE)

• Hypothesis Ho = Purchasing perception is independent

of age Ha = Purchasing perception is not

independent of age

Step -2 Chi-square = ∑ (fo- fe) /feStep -3 α = 20 % = .20

2

Chi –square test

Step -4 The degree of freedom are (5-1) (4-1) = 12 and critical value

χ = 18.54 • The decision rule is to reject null hypothesis if

observed value of chi-square is greater than 18.54

2

.10, 12

Chi –square test• Observed value of chi- square χACTION The Observed value of Chi-square is

greater than the critical value 18.54 so the null hypothesis is rejected

BUSINESS APPLICATION :- Peoples purchasing perception is not in depended on the age. so CEAT tyres should focus on those criteria which have major point as service and quality for increasing their sales.

= 18.84 2

If ceat provide it at the petrol pumps you like buy tyres from the petrol pumps

Frequenc

y PercentValid

PercentCumulative Percent

Valid yes

79 68.7 68.7 68.7

no

36 31.3 31.3 100.0

Total

115 100.0 100.0

If ceat provide it at the petrol pumps you like buy tyres from the petrol pumps

68.7 %31.3 %


Perception of petrol pumps owners


PercentCumulative Percent

Valid very interested 18 81.8 81.8 81.8

can think about it 4 18.2 18.2 100.0

Total

22 100.0 100.0

Perception of petrol pumps owners

81.8 %

18.2 %

Perception of petrol pumps owners to start selling of tyres

Frequen

cy PercentValid

Percent

Cumulative

PercentValid yes

17 77.3 77.3 77.3

no5 22.7 22.7 100.0

Total22 100.0 100.0

Perception of petrol pumps owners to start selling of tyres

77.3 %

22.7 %

ANALYSIS FROM BIKE RIDERS & PETROL PUMPS OWNERS DATA

• Age group (18-25), (25-30), use to come more on Petrol pumps, invest more money on fueling , so CEAT should focus on these groups

• Few petrol pumps fuel quality is to good, people come these petrol pumps from long distance, such petrol pumps can be use for the sale of tyres.

• from the chi-square test peoples purchasing perception is not depended on the age, CEAT should focus on the services & quality CEAT should focus on services as avability and replacement of tyre at every place

• MRF,J.K.TYRES have more market share than CEAT . so CEAT require to do some advertising of their brand.

• Petrol pumps owners are ready to sell the tyres at the petrol pumps because it would be part time businees to them

• If CEAT opens their srvice centre/shops/ provide tyres at the petrol pumps people are ready to purchase tyres from the petrol pumps.

DATA ANALYSIS FROM AUTO PARTS SHOPS

Research Methology• If CEAT PROVIDES TYRES AT THE AUTO PARTS SHOPS SO THEIR

SALE WILL INCREASE OR NOT• Wilcoxon matched paired signed rank testHypothesis :- H 0 = There would not be difference on the sales• H a = There would be difference on the sales• Step 2:- Significance Level = 0.25• Step 3:- Rejection Region Reject the null hypothesis if p-value ≤ 0.25

• a monthly sale can be < monthly sale of tyres• b monthly sale can be > monthly sale of tyres• c monthly sale can be = monthly sale of tyres

Monthly sale can be – monthly

sale of tyresZ -4.479(a)

Asymp. Sig. (2-tailed) .000

a Based on negative ranks.b Wilcoxon Signed Ranks Test

Step 5: DecisionSince p-value = 0.000 ≤ 0.25, we reject the null hypothesis.

Step 6:- If CEAT made available tyres at the auto parts shops sales of tyres will increase

Preference to sell a brand of tyres of Auto parts shops

Frequen

cy PercentValid

Percent

Cumulative

PercentValid avaibility

14 25.5 25.5 25.5

margin 23 41.8 41.8 67.3

quality 17 30.9 30.9 98.2

price 1 1.8 1.8 100.0

Total 55 100.0 100.0

ANALYSIS FROM THE AUTO PARTS SHOPS

• Auto parts shops owners sell tyres on the basis of margin, quality and avaibility which company provide more margin they prefer that tyres more to the consumers

• If CEAT provide tyres at their shops so their transporting cost will get reduce and

they would be able to get more margin from ,it they will prefer CEAT more for the sale.

• If CEAT made available tyres at the auto parts shops their market will increase,

at the present time avaibility of CEAT is not sufficient in the market, distribution channel is not sufficient

• Auto parts shops owners categories MRF as A and CEAT B but lack of advertising by the CEAT people prefer other branded tyres ( j.k.,mrf, tvs, ) more.

POTENTIAL MARKET OF CEATName Potential CEAT Strong CEAT Marginal CEAT Absent

MAINPURI 3110

KARHAL 328

SAIFAI 244

MAHEVA 316

BABURPUR 310

AJITMAL 204

BAKEWAR 178

BHARTHNA 524

LAKHNA 142

EKDIL 134


JASWANT NAGAR 344

ETAWAH 2800

MILAK 348

KAIMREI 324

BILASPUR 484

RAMPUR 3810

MIRANPUR 358

TILHAR 718

SHAHJAHAPUR 4040

DEVCHARA 280


BUDAUN2008

RITHOURA190

PILIBHIT 1682

BAREILLY 9486

JAHANABAD 163

THRIYAW

BINDKI 232

CHAUDAGRA 69

BAHUWA 63

FATEHPUR 843

KHAGA77

TOTAL TWO WHEELER TYRES POTENTIAL MARKET OF ETAWAH (8734 tyres/month )

TOWN POPULATION POTENTIAL MARKET

POTENTIAL monthly demand

MAINPURI 279800/5 55960/12*3 3110

KARHAL 29500 5900 328

SAIFAI 21900 4380 244

MAHEVA 28500 5700 316

BABURPUR 27900 5580 310

AJITMAL 18500 3700 204

BAKEWAR 15920 3184 178

BHARTHNA 47180 9436 524

LAKHNA 12760 2552 142

EKDIL 12030 2406 134

JASWANT NAGAR

30830 6166 344

ETAWAH 252180 50436 2800

SET UP A DISTRIBUTORS

• If CEAT set up a distributor in ETAWAH then• Route• Route wise potential • Route mapping• R O I Calculation for petrol pumps and auto

parts shops

ETAWAH

maheva

18km

15km

Baburpur

4km

Ajitmal

Ekdil

10km

Jaswant nagar

28km

saifai

Karhal

Mainpuri

16Km

25Km

28Km

Bharthna

24Km

Bakewar

Lakhna

30Km

3Km

26Km

Etah130Km

12.76

15.92

47.18

12.03

252.18

30.83279.8

29.5

21.9

28.5

27.9

18.5

130.8

Route 1

Route 2

Route 3

Route 4

Route wise potentialRoute Town Potential

Route 1 Etawah-saifai-karhal-mainpuri

3682

Route 2 Etawah-maheva-baburpur-ajitmal

930

Route 3 Etawah-bharthna-bakewar-lakhna

844

Route 4

Route 5

Etawah-jaswant nagarEtawah-ekdil

Etawah local

478

2800

Total potential tyres = 8734

Cluster Maping

TOTAL POTENTIAL MARKET OF BAREILLY TOWN POPULATION POTENTIAL

MARKETPOTENTAIL MONTHLY DEMAND

MILAK 31182 6236 348

KAIMERI 29101 5820 324

BILASPUR 43590 8718 484RAMPUR 342880 68576 3810

KATRA MIRANPUR 32173 6435 358

TILHAR 64550 12910 718

SHAHJAHAPUR 363478 72696 4040

DEVCHARA 25,000 5,000 280

BINAVER 26732 5346 296

BUDAUN 180728 36146 2008

TOTAL POTENTIAL MARKETTOWN POPULATION POTENTIAL

MARKETPOTENTIAL MONTHLY DEMAND

RITHOURA 17134 3426 190

NAWABGANJ 37333 7466 415

PILIBHIT 151380 30276 1682

BAREILLY 853803 170760 9486

TOTAL POTENTIAL = 24439 TYRES


• If CEAT set up a distributor in BAREILLY then• Route• Route wise potential • Route mapping• R O I Calculation for petrol pumps and auto

parts shops

ROUTE WISE POTENTIALROUTE TOWN POTENTIAL

ROUTE 1 BAREILLY-MILAK-KAIMERI-BILASPUR-RAMPUR-BAREILLY

4966

ROUTE 2 BAREILLY-MIRANPUR-TILHAR-SHAHJAHAPUR-BAREILLY

5116

ROUTE 3 BAREILLY-DEVCHARA-BINAVAR-BUDAUN-BAREILLY

2584

ROUTE 4 BAREILLY-RITHOURA-NAWABGANJ-PILIBHIT-BAREILLY

2287

ROUTE 5 BAREILLY LOCAL 9486

Route 1 route 2

BAREILLY340

MILAK(31.1, 25KM)

KAIMERI

RAMPUR(342.8, 17KMBILASPUR

(43.1, 10KM)

MIRANPUR(32.1, 20KM)

TILHAR(64.5, 28KM)

SHAHJAHAPUR(363.4, 37KM)

DEVCHARA(25, 10KM)

BINAVER(26.7, 18KM)

BUDAUN(180.7, 27KM)

RITHOURA(17.1, 10KM)

NAWABGANJ(37.3, 28KM)

PILIBHIT(151.3, 25KM)

(29.1, 15KM)

Route 3

Route 4

ROUTE CLUSTER

BAREILLY

MILAK

KAIMERI

BILASPUR

RAMPURMIRANPUR

TILHARSHAHJAHAPUR

DEVCHARABINAVERBUDAUN

RITHOURANAWABGANJPILIBHIT

(4966, 67KM)

(2584, 55KM)

(2287, 63KM)

(5116,85KM)

(9486, 40KM)

FOR ROI CALCULATION• For Distributorship to Spare Parts Shops:• Annual Rent = 1, 80,000• SDS= 1, 50,000• LCV Cost =2, 25,000 • CAPACITY = 10 TON (500 TYRES)• • Monthly Expenses• • DIESEL required = (Total distance/Mileage)• Expenses on diesel = required diesel * rate per ltr• Salary Expenses (1- driver, 1- Accountant, 1- sales person, 2- labour) = • Advertisement expenses =• Invoice price = 1165• Selling price = 1300• Discount from CEAT = 6% on invoice price /tyre =70• Total profit = 205 Rs / tyre• Mileage of LCV = 15 Km / Litre• Diesel cost = 37 Rs / Litre• Driver salary = 6000 Rs/ month• Accountant salary = 10,000 Rs / month• Super wiser salary = 10,000 Rs / month• CEAT Person = 10,000 Rs / month• Labour salary = 4000 Rs / month• Total salary expenses = 40,000 Rs• Mislleneous = 5,000 Rs / month

FOR ROI CALCULATION• For Distributorship to Petrol Pump Owners:

• Establishment Cost = 1, 50,000 Rs• SDS = 1, 50,000 Rs

LCV Cost = 2, 25,000 (MAHINDRA GIO)• CAPACITY = 10 TON (500 TYRES)• Monthly Expenses• • DIESEL required = (Total distance/Mileage)• Expenses on diesel = required diesel * rate per litre• Salary Expenses (1- driver, 1- Accountant, 1- sales person, 2- labour) = • Advertisement expenses =• Invoice price = 1165• Selling price = 1300• Discount from CEAT = 6% on invoice price /tyre =70• Total profit = 205 Rs / tyre• Mileage of LCV = 15 Km / Litre• Diesel cost = 37 Rs / Litre• Driver salary = 6000 Rs/ month• Accountant salary = 10,000 Rs / month• Super wiser salary = 10,000 Rs / month• CEAT Person = 10,000 Rs / month• Labour salary = 4000 Rs / month• Total salary expenses = 40,000 Rs• Mislleneous = 5,000 Rs / month

ROI CALCULATION FOR PETROL PUMPSESTBLISHMENT+SDS+LCV COST =525000 /60 = 8750 Rs

SALARY+MISLLENEOUS = 45000 Rs

DIESEL EXP =(486 +80)/15 = 37.37*37 = 1396 Rs

POTENTIAL TYRES MARKET FOR CEAT = 24439*25/100 = 6110 TYRES

INVESTMENT = 6110*1165= 7118150 Rs

PROFIT =6110*205 =1252550 Rs

NET PROFIT = 1206154 Rs

ROI = 16.94%

ROI CALCULATION FOR AUTO PARTS SHAOPSRENT = ANNUAL/12 = 1,80,000/12

= 15000 Rs

SDS+LCV COST = 375000 Rs

SALARY + MISLLENEOUS = 45000 Rs

DIESEL EXP =(486 +80)/15 = 37.37*37 = 1396 Rs


INVESTMENT = 6110*1165= 7118150 Rs

PROFIT = 6110*205 = 1252550 Rs


ROI = 16.73 %

POTENTIAL MARKETTOWN POPULATION POTENTIAL

MARKETPOTENTIAL MONTHLY DEMAND

JAHANABAD 29,341 5868 163

BINDKI 41,720 8344 232

CHAUDAGRA 12,348 2470 69

BAHUWA 11,360 2272 63

FATEHPUR 1,85,144 30352 843

KHAGA 14,688 2938 82

KHAJUHA 13,780 2756 77

TOTAL POTENTIAL = 1529 TYRES


• If CEAT set up a distributor in FATEHPUR then• Route• Route wise potential • Route mapping• R O I Calculation for petrol pumps and auto

parts shops

FATEHPUR

KHAGA(14.6, 25KM)

BAHUWA(11.3, 22KM)

BINDKI(41.7, 24KM)

KHAJUHA(13.7, 8KM)

JAHANABAD(29.3, 18KM)

CHAUDAGRA(12.3, 10KM)

ROUTE 1

ROUTE 2

ROUTE 3

FATEHPUR

KHAGA

BAHUWA

BINDKIJAHANABAD

KHAJUHACHAUDAGRA

(82,25KM)

(541, 60KM)

(63, 22KM)

(843, 26KM)

ROI CALCULATION FOR PETROL PUMPSESTBLISHMENT+SDS+LCV COST =525000 Rs

SALARY+MISLLENEOUS = 45000 Rs

DIESEL EXP = ( 210+64)/15= 18.26*37 =676 Rs


INVESMENT = 446195 Rs

PROFIT = 383*205 = 78515 Rs


ROI = 17.59 %

FINDINGS• No of local & international Brands present in the market• Auto parts shops owners get it after 4-5 stage so margin get low while

price get high• CEAT have not Sufficient advertising in rural area’s • Dealers promote other tyres due to more margin• Hindi advertising not present in rural area’s while in rural area’s people

prefer more Hindi advertising• People are unaware of guaranty scheme of CEAT• Petrol Owners are ready to sell tyres of CEAT • Auto Parts are ready to sell CEAT if they get it timely• Bike riders are ready to purchase tyres from the Petrol Pumps if CEAT start

selling tyres through petrol pumps

SUGGESTIONS • Petrol pumps can be use for the distribution of the tyres • Petrol pumps owners are ready to sell the tyres at the petrol pumps if

CEAT provides the tyres to them or CEAT give the distribution ships to them

• A route cluster must be adopt for the distribution of tyres because a lot

of potential exist in the route, every route cover numbers of village where huge potential present

• Dealer ship must be given 2-3 persons in those areas where high

potential market present • Tyre must be available at the auto parts shops timely

• In Rural Areas Hindi advertising must be present; people are totally unaware of CEAT’s

life time replacement guaranty scheme, so guaranty scheme must be present in the advertising

• For the distribution of tyres in villages milk van can be use because every mornings and

evening these go to villages

For advertising

• Hoarding must be present at Bus Stands, Squares, Theatres, Enter and Exit Doors of the Towns

• Steger must be use on Bus, Trucks, Auto rickshaw and Loaders • Banners at the time of Festivals• Distribution of the Caps• (DIWALI, DASHAHRA, EAD)• Wall paintings /1/2km Distance • Use the Local Dish Channel for the Advertising of CEAT (MONTHLY CHARGES 100-150)

LIST OF PEOPLES WHO HAD GIVEN HAND WRITTEN LETTERS FOR INVESTING THE AMOUNT FOR THE DISTRIBUTORSHIPS

NAME ADDRESS MO. AMOUNT

A .Varshi (D) Kanpur road. Etawah

9457286493 11 lacks

Uday narayan(D)Kanpur road, Etawah 9410056767

10 lacks

Laxmi narayan(D)curt road, Bareilly 9457629103

10lacks

Anand kumar GUPTA(A) Jaswant nagar, Etawah

9411870122

6LACKS

Shyam sunder verma Baburpur, Etawah 9879491709 8LACKS

THANKU

BRAJENDRA SHARMA

Documents

Ceat tyre summer intership report for Penetration in the market & Set up New distribution channel, Finding New Point of sales