CHAPETR 1: INTRODUCTION

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1.1 COMPANY HISTORY

JK Tyre was incorporated as a private limited company in West Bengal in February 14,

1951.  Until March 31, 1970, the company was engaged in the managing agency busi-

ness. Thereafter, the company decided to undertake manufacturing activities and obtained

a letter of intent in February 1972 for the manufacture of automobile tyres and tubes.

JK Tyre & Industries is the flagship company under the umbrella of JK Organisation. JK

Tyre and Industries is a mega corporate entity that is emblematic of excellence, diversifi-

cation and pioneering new technologies. A part of JK Organization which ranks among

the top private groups private groups in India, Jk Tyre and Industries is committed to self

reliance and follows an ethic that views customer satisfaction as an index of achievement.

JK Tyre is the pioneer for Steel Radial technology in India.

Over the years, the company has expanded and diversified its business portfolio. It has

developed into a multi product, multi-location corporate entity. The company produces

and sells tyres and tubes under the brand name 'JK Tyre' for Truck, Buses, Passenger

Cars, Jeeps, Light Commercial Vehicles, Multi Utility Vehicles and Tractors

The company’s three plants are located in Rajasthan, Madhya Pradesh and Karnataka, JK

Tyre is the largest manufacturer of truck and bus tyres in India. The truck and bus tyres

produced account for nearly 74% of the total tyre business in India, thus giving JK Tyre

an undisputed position. Additionally, JK Tyre is the only manufacturer of truck/ bus steel

radial tyres, and the second largest manufacturer of 4-wheeler tyres in the country.

J.K. Industries acquired Vikrant Tyres, Mysore in 1997. J.K. Industries and Vikrant Tyres

are the only tyre companies in India to have received all three ISO 9001, QS 9000 and

ISO 14001 certificates.

The company has a technical collaboration with Continental AG, Germany, which is

among the top five tyre manufacturers in the world to keep pace with latest technological

developments. To stay at the forefront of technological advancements a state of art Re-

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search & Development Centre, HASETRI, was set up, which remains the nerve centre for

providing cutting edge technology. In a short span of time it has emerged as the 17th

largest tyre manufacturer in the world an achievement in itself.

The company design tyres for the vehicles using the latest tools & techniques which en-

able us to judge and eliminate chances of failure at the drawing board stage only. The Ra-

dials are manufactured in an air conditioned plant equipped with the finest machines so

that you get consistently good quality.

1.2 THE INDIAN TYRE INDUSTRY-AN OVERVIEW

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Highlights

The tyre industry is a Rs. 12,000 crore industry. The fortune of this industry

depends on the agricultural and industrial performance of the economy, the transportation

needs and the production of vehicles. While the tyre industry is mainly dominated by the

organized sector, the unorganized sector holds away in bicycle tyres. In the last five years

(2001 to 2006), the industry managed to achieve a compounded annual growth of only

4.40 per cent. However in the last fiscal the industry registered a growth of 7 per cent.

Natural rubber constitutes 25 per cent of the total raw material cost of the tyres.

The ratio of natural rubber content to synthetic rubber content is 80:20 in Indian tyres,

whereas world wide, the ratio of natural rubber to synthetic rubber is 30:70. The overall

recession in the Indian economy and especially the automobile sector continued for 3-4

years. The largest hit among the auto sector was the commercial vehicle segment. Tyre

industry is capital intensive, and as production is released in spurts, it leads to constant

demand-supply imbalances and consequent cyclically in prices.

As raw materials form 70% of the costs, variable costs are very high. Profit

margins are therefore thin. Production process is technology intensive and globally huge

sums are invested in R&D. Tyre demand is a derived demand.

Sector Comments

Ever since the first Indian tyre company, Dunlop Rubber Company (India) was

incorporated in 1926, the tyre industry has grown rapidly and today it is a Rs. 12,000

crore industry. India has 2.61 lakhs villages, connected by 6.23 lakhs kms of metalled

roads and 9.81 lakhs kms of unmetalled roads. These villages are linked to small towns

and cities. There is a daily traffic of over 4.12 lakhs trucks, 1.27 lakhs buses, 7.23 lakhs

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cars, and thousands of taxis, two-wheelers, tractors and animal driven vehicles on Indian

roads. There exists a vast potential for the tyre industry in India. The fortune of the tyre

industry depends on the agricultural and industrial performance of the economy, the

transportation needs and the production of vehicles. Hence, this is a very sensitive

industry, which has to adapt itself to a highly volatile environment.

Market Profile

While the tyre industry is mainly dominated by the organized sector, the un-

organized sector holds sway in bicycle tyres. The major players in the organized tyre

segment consist of MRF, Apollo Tyres, Ceat, and JK Industries, which account for 63 per

cent of the organized tyre market. The other key players include Modi Rubber, Kesoram

Industries and Goodyear India, with 11 per cent, 7 per cent share and 6 per cent share

respectively. Dunlop, Falcon, Tyre Corporation of India Limited (TCIL), TVS-srichakra,

Metro Tyres and Balkrishna Tyres are some of the other players in the industry. MRF, the

largest tyre manufacturer in the country, has strong brand equity. While it rules supreme

in the industry, other players have created niche markets of their own.

Sector specifics

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The tyre industry is a major consumer of the domestic rubber production. Natural

rubber constitutes 80 per cent of the material content in Indian tyres. Synthetic rubber

constitutes only 20 percent of the rubber content of a tyre in India. World wide, the ratio

of natural rubber to synthetic rubber is 30:70. Apart from natural and synthetic rubber,

rubber chemicals are also widely used in tyres.

Most of the RSS-4 grade natural rubber required by the Indian tyre industry is

domestically sourced, with only a marginal amount being imported. This is an advantage

for the industry, since natural rubber constitutes 25 per cent of the total raw material cost

of the tyres. The two types of synthetic rubber used in tyres are Poly Butadiene Rubber

(PBR) and Styrene Butadiene Rubber (SBR). The former is used in most of the tyres,

while the latter is mainly used in the radials for passenger cars. Synthetic rubber accounts

for 14 per cent of the raw material cost. Unlike in the case of natural rubber, India

imports 60 per cent of its synthetic rubber requirements.

Apart from rubber, major raw materials are nylon tyre cord and carbon black. The

former is used to make the tyres strong and impart tenacity to it. The latter is responsible

for the colour of the tyre and also enhances the life span of the tyre. Nylon tyre cord

comprises 34 per cent, while carbon black accounts for another 13 per cent of the raw

material cost. In India, the carbon black used is of the N660, N220 and N330 variety.

To sum up, the tyre industry is highly raw-material intensive, with raw material

costs accounting for 70 per cent of the lost of production. Fortunately for the industry, the

rubber and carbon black prices have taken a beating recently, which means lower costs

for the tyre industry. The export-import policy allows free import of all types of new

tyres and tubes.

Sector Trends

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Cross ply tyres have been used in India for several decades. In these tyres, the ply

cords run across each other or diagonally to the outer surface of the tyre. Rayon and

nylon tyre cords are used as the reinforcing medium. These tyres can be retreaded twice

during their lifetime and are hence preferred by Indian transport operators who normally

overload their trucks. A vehicle with the normal carrying capacity of around 12 tones is

usually loaded with double the capacity. Moreover, one also has to contend with the bad

suspensions and bad road conditions. No wonder, 95 per cent of the tyres used in India

are cross plies. Radial tyres have their cords running radially from bead at 90-degree

angle to the rim or along the outer surface of the tyre.

The reinforcing mediums used in these tyres are polyester, nylon, fiberglass and

steel. Hence, these tyres are 20 per cent more expensive than the cross plies. But they

have a longer life and provide lower fuel consumption. The unhealthy condition of the

Indian roads has resulted in radial tyres accounting for only 5 per cent of the tyre industry

as against a global trend of 60 per cent. With two-thirds of the capacity of all major tyre

manufacturers being reserved for radials, this is a real cause for concern.

1.3 SALIENT FEATURES OF INDIAN TYRE INDUSTRY

The Indian tyre market is expected to grow by 12% this year.

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As automobiles have become more sophisticated, technology has become key to

success in this sector.

Truck and bus segment account for 60% of the total tyre market by value.

Passenger car radials are the most profitable but because of poor road conditions

in India; truck radials are yet to catch on.

It will take at least 5 years for light trucks and over 10 years for heavy trucks to

reach 25-30% radialisation.

With the large additions in capacity over the last two decades, tyre companies

have found themselves hard-pressed to maintain market share.

Adaptability & Absorption

Successful and fast absorption of international technology and availability of

technical expertise and professionals to absorb and implement technical advancements.

Innovativeness

Several innovations introduced to apply international technologies/ processes to

create tyres suitable for Indian road conditions.

Exports

Sustained exports for over a decade to more than 50 countries. All large tyre

companies are exporting, with over 30% exports to US. Approx. 20% of total Truck &

Bus tyres produced domestically is exported. All large companies are engaged in

sustained exports as a long-term commitment.

Technology Progression

Within a span of four decades, technology progression from cotton

(reinforcement) carcass to high performance radial tyres.

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Indigenous and Ready Availability

New vehicle manufacturers, while launching a series of latest models, have easy

access to (and ready availability of) indigenous tyres of their respective specifications and

matching international standards.

1.4 TYRE INDUSTRY IN INDIA COMPRISES:

40 tyre companies (53 factories), 12 companies account for over 85% of total production

(In Nos.)

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1. APOLLO TYRES

2. J.K TYRES

3. MODISTONE

4. BIRLA TYRES

5. CEAT

6. MODI RUBBER LTD

7. CEAT INDIA LT

8. MRF LTD

9. FALCON TYRE LTD

10. PREMIER TYRE LTD

11. GOODYEAR INDIA LTD

12. VIKRANT TYRE LTD

AN OVERVIEW OF TYRE INDUSTRY

Industry turnover Rs 100,000 Million

Installed capacity 5730 Million Numbers

Production 4140 Million Numbers

Capacity Utilization 72%

(2005-2006)

Taxes and Duties paid Rs 28,500 Million

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CHAPTER 2: COMPANY PROFILE

WITH COMPETITORS

2.1 ABOUT JK TYRE

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Jk Tyre and Industries is a mega corporate entity that is emblematic of excellence,

diversification and pioneering new technologies. A part of JK Organization which ranks

among the top private groups private groups in India, Jk Tyre and Industries is committed

to self reliance and follows an ethic that views customer satisfaction as an index of

achievement.

Over the years, the company has expanded and diversified its business portfolio. It has

developed into a multi product, multi-location corporate entity comprising of following

business divisions:

The advent of JK Organization on the industrial landscape of India almost synchronizes

with the beginning of an era of industrial awareness - an endeavor for self reliance and

the setting up of a dynamic Indian industry. This was way back in the middle of the 19th

century. And the rest that followed is history.

CORE VALUES:

JK Organization has been a forerunner in the economic and social advancement of India.

It always aimed at creating job opportunities for a multitude of countrymen and to

provide high quality products. It has striven to make India self reliant by pioneering the

production of a number of industrial and consumer products, by adopting the latest

technology as well as developing its own know-how. It has also undertaken industrial

ventures in several other countries.

JK Organization is an association of industrial and commercial companies and charitable

trusts. Its member companies, employing nearly 50,000 persons are engaged in the

manufacture of a variety of products and in diverse fields of commerce.

Trusts are devoted to promoting industrial, technical and medical research, education,

religious values and providing better living and recreational facilities. With the spirit of

social consciousness uppermost in mind, J.K. Organization is committed to the cause of

human advancement.

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1995 Mercedes Benz Launched on JK steel radials

First tyre manufacturer in the world to get ISO 9001

1996 India's first dual contact high traction steel radial- aquasonic launched.

Introduced steel wheels.

1997 Awarded the National Export Award for 96-97.

Vikrant Tyres (VTL) acquired.

India's first H rated tyre launched.

Only Tyre manufacturer to get 'E' Mark certification.

HASETRI became the first research institute in Asia to get ISO 9002.

1998 First tyre manufacturer in the world to get QS 9000.

Awarded CAPEXIL's highest export award for 1997-98.

1999 Synergy with VTL in procurement, marketing and production flexibility.

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Completion of state of the art modernisation of truck radials.

JK Tyres ranked 16th largest Tyre Company in the world.

ISA - 14000 accredition for environment & safety.

2000 JK introduced National Go-Karting Championships.

2001 Recieved CAPEXIL award.

J.K. Industries recieved FOCUS LAC export award for the year 1999-2000.

Commendation Certificate of CII Exim.

IInd National Go-Karting Championships held.

JK Tyre's No 1 market position

In what is being considered as a landmark decision in the highly competitive Indian tyre

industry, the Advertising Standards Council of India (ASCI) has upheld JK Industries

Ltd's claim of being India's No 1 tyre manufacturer in the four-wheeler tyre segment,

reaffirming JK's leadership position in the market.

Expressing his happiness over ASCI's judgement, JK Tyre marketing director T K

Banerjee says: ''This is a fabulous example of why all of us need to have faith in bodies

like ASCI. We believe that the process of self-regulation in Indian advertising is working

for both companies and agencies. We also hope that this would encourage various players

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to bring superior technology and consumer service standards and claim leadership in a

more healthier and competitive manner.''

The case was started when few competitors filed a complaint with ASCI against JK

Tyre's print advertisement, in which JK Tyre announced its numero uno position in the

four-wheeler tyre segment, quoting production figures compiled by Automotive Tyre

Manufacturer Association and other authentic industry sources.

But the competitors contradicted the claim, stating the fact that market figures from a

company's annual report should be used as authentic data to claim one's leadership, not

the production figures.

But ASCI considered the case at the Consumer Complaints Council on 23 May 2002 and

upheld JK Tyre's contention that production figures, as compiled by authentic industry

sources and used by JK Tyre to claim its leadership, is a valid and applicable comparison

platform.

Hence, JK Tyre's claim as No 1 tyre manufacturer in India is a perfectly valid and correct

statement. This also reflects ASCI's agreement to JK Tyre's viewpoint that figures, as

stated in the one's annual report, could actually be misleading and could include revenues

from non-tyre-related businesses also.

JK Tyre, pioneers of radial technology in India, is today India's largest manufacturer of

tyres in the four-wheel segment, including tyres for trucks and buses, LCVs, passenger

cars, jeeps, tractors, ADVs and OTRs. After 25 years of pioneering world-class

technologies in India, JK Tyre has recently launched the country's first eco-friendly

coloured tyres as well as steel-belted tractor rear radials.

2.2VISION AND MISSION

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VISION

TO be amongst the most admired companies in India committed to excellence

MISSION

To be the largest & profitable tyre in India.

To retain no 1 position in truck & bus segment and to be amongst top two in all

other four-wheeler tyre segment.

To make truck/ bus radial operations profitable and retain leadership in the

passenger radial market.

To be largest Indian tyre exporter

To is customer-obsessed company

To enhance value to shareholders an service to stake holders

To develops highly motivated team with a sense of Amanda.

To excel as value driven organization.

To be the most preferred tyre brand in India.

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2.3 BOARD OF MEMBER

Name Designation

Hari Shankar Singhania Chairman / Chair Person

Arvind Singh Mewar Director

Govind Ballabh Pande Director

Om Prakash Khaitan Director

Bharat Hari Singhania Managing Director

Swaroop Chand Sethi Whole Time Director

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2.4 PLANT

With three plants located in Rajasthan, Madhya Pradesh and Karnataka, JK Tyre is the

largest manufacturer of truck and bus tyres in India. The truck and bus tyres produced ac-

count for nearly 74% of the total tyre business in India, thus giving JK Tyre an undis-

puted position. Additionally, JK Tyre is the only manufacturer of truck/ bus steel radial

tyres, and the second largest manufacturer of 4-wheeler tyres in the country.

Also, JK Tyre is the largest exported tyre brand from India. It was awarded the

CAPEXIL's Highest Export Award for 1997-97 by FIEO. It enjoys preferred premium

brand status in Truck Bias market in USA and across many markets in Africa, Middle

East and South East Asia.

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2.5 THE CURRENT SCENARIO OF JK TYRES

` JK Tyres have risen by leaps and bounds by posting a net profit of Rs. 44.2mn in

April, 03 as compared to Rs. 23.8mn in the corresponding period last year. This happened

due to a rise in sales and operating margins.

Net sales raised due to a rise in demand for commercial vehicles and passenger

cars. Operating margin (less other income) has risen fallen to a rise in prices of important

petroleum based raw materials like carbon black and nylon tyre cord. The management

has succeeded in keeping a check on interest costs, which, however, provided as a

support to the bottom line.

The recent development of FII’s expressing their desire to sell their 44% stake in

the company is still hanging fire with the management opposing such a move. The

outlook for the company is not rosy, as it will be facing increasing competition from the

likes of Apollo Tyres, Ceat and Goodyear.

Technology leadership

Pioneered the Radial Revolution in India.

Introduced T- Rated Radial Tyres in India.

ISO 9001 – World’s first ever tyre company to get this certification for entire

operations.

Introduced H- Rated Radial in India.

QS- 9000 - World’s first tyre company for multi- location operations.

ISO – 14001 - India’s first tyre company for multi- location operations.

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R & D Center

Hari Shanker Singhania Elastomer & Tyre Research Institute (HAESETRI) – an

independent research institute promoted by JK Tyre is engaged in basic & applied

research in elastomer & tyre including assimilation and dissemination of knowledge, First

of its kind in India.

Quality Movement

J.K. Tyre has the following Quality System Accreditation to its credit:

ISO 9001

QS 9000

ISO 14001

HASETRI has the following Quality system Accreditation:

ISO 9002

Sales and Service

Country’s top exporter with exports to 50 countries across six continents. It has a

vast distribution and service network besides the unique “steel wheels” outlets – a chain

of more than 90 tyre care centers across India. It has unique “dial a tyre” service to its

credit.

Continuous up-gradation.

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IN pursuit of excellence, J K has invested Rs 280 Crores in last five years on up

gradation of manufacturing facilities.

ASSOCIATION WITH MOTOR SPORTS

JK Tyre has expressed its corporate responsibility in the development of exports

in India, promoting professional rallying and racing by sponsoring team of drivers-“Team

JK Tyre”, which has reigned as the “national Rally Champion” for four years in a row

(2001-2005).

JK adopted the promotion and development of Motor sports as its long-term

strategy. It has taken upon itself the task of identifying motor sport racing talent in the

country and then guides these talents to get essential exposure to various national and

international forums.

Akbar Ebrahim: The first Indian to drive in F2 and F3 championship.

Narain Karthikeyan: The first Indian to test drive at F1.

Parthiva Sureshwaran: The fastest Indian in Asia.

The above-mentioned are few name of outstanding talented drivers, JK has put on the

International circuit. Over the span of last five years, JK has invested over Rs 15 crores to

support its several initiatives in this direction and build a unique infrastructure.

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SUPPLY CHAIN MANAGEMENT

Long term partnerships, have been developed with technical collaborators,

OEM’s dealers / distributors, C&F agents, Transporters, service providers and vendors.

These partnerships have been developed over last few years and are based on mutual trust

and benefits. The partners have been selected on the basis of the items as well as their

capabilities to meet their volumes, quality, delivery and other service requirements.

TECHNICAL COLLABORATIOR CONTINENTAL AG, GERMANY

JK tyre has long-term partnership of more than 25 years with them, and still going

strong.

OEM’s

They have two major OEM’s as their partners – Maruti Udyog and Mahindra

Automotives. They are the only tyre company, which was audited by Suzuki Motor

Corporation R&D for ascertaining their capabilities to tailor make a Tyre, which could

provide optimal performance of the vehicle.

DEALEARS / DISTRIBUTORS

In the replacement market they have around 3500 dealers in the country. In

addition, an innovative concept of “steel wheels” outlets has been created – currently the

chain has 90 tyres care centers, which will increase to 230 by April’07.

A one-stop shop for the wheel alignment, computerized wheel balancing and automatic

tyre changing were few concepts provided by JK Tyres to its customers through their

dealers and distributors.

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Through the concept of “A SYNERGY OF ENERGY” JK and Indian Oil Corporation

have built a mutually beneficial relationship to service the customer. This includes

installation of air filling stations and free tyre check camps at selected IOC petrol pumps.

C&F AGENTS

JK have 51 C&F Agents spread all across the country.

EXPORTS

Based on the principles of dealing, reliability of quality and delivery and standing

by the customer during difficult market conditions has paid dividend in terms of

consistent exports over the last four years. As a result, export volumes of truck / bus tyres

as a total truck tyre production has been higher than the industry average by 3-5%.

TRANSPORTERS

JK have developed transporters for movement of both finished goods as well as

raw materials on the basis of SWOT analysis, their customer base, responsiveness etc.

Training is imparted to them on various aspects of Quality Management System (QMS)

and Environment Management System (EMS). Around 40% of their transport business is

handled by one of their major transport.

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Awards/Recognition:

JK Tyre is the largest exported tyre brand from India.

It was awarded the CAPEXIL’s Highest Export Award for 1997-97 by FIEO. It

enjoys preferred premium brand status in Truck Bias market in USA and across

many markets in Africa, Middle East and South East Asia.

ISO 9001, QS 9000 and ISO 14001 certified

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2.6 COMPETITORS INFORMATION

The company is one among the major players in the Indian tyre industry the main

competitors being. Apollo, MRF, CEAT, Birla G- year Bridgestone.

The competition is not restricted to the product mix only but also to the price mix

promotion mix product range quality product development product positioning and other

areas in preview of marketing management.

J.K Tyre has successfully overcome the prevailing recession in the economy and

further strength then its position vis-à-vis competitors by improved operations cost

reduction and aggressive consumer focused marketing.

The rate of growth is much higher than the comparative growth in the industry.

BRIEFING ABOUT THE COMPETITIOR

The various tyre companies studied as competitors are :

GOODYEAR

MRF

DUNLOP

CEAT

APOLLO

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GOODYEAR INDIA LTD: -

Goodyear India ltd is subsidiary of Goodyear an American multinational that is

one of the largest tyre manufacturers in the world. Goodyear has a substantial share in the

global market and in 1955 it was 3rd among the top 20 tyre manufacturers in the world

with sales of $10105million. But Goodyear indicated is relatively enjoying a market

share of about 6% and despite strong brand loyalty has not been able to overcome its

increase in its cost. Goodyear's presence in India is over 80 years old, with two plants,

one each in Ballabgarh and Aurangabad.

A chronology of Goodyear's continued success in India is as follows:

1993: Goodyear formed a 50-50 joint venture with South- Asian Tyres Ltd. (SATL) at

Aurangabad to manufacture state-of-art radial tyres for car and light truck and bias con-

struction tyres for graders and earthmovers.

1996: The first tyre GPS2 radial Passenger was rolled out from Aurangabad plant

1998: SATL becomes a fully owned Goodyear Company

1999: A significant investment of 9.3 MM USD was made in the farm tyre manufacturing

process.

2002: Goodyear becomes the first tyre manufacturer to roll out tubeless tyres on Indian

roads. In the passenger car segment, Goodyear supplies tyres to many of the leading Ori-

ginal Equipment manufacturers in India. These include Maruti, Telco, Mahindra &

Mahindra, Ford, Fiat and many more. Goodyear India has been a pioneer in introducing

tubeless radial tyres in the passenger car segment. Similarly, for buses and trucks,

vehicles rolling out of the assembly line of the leading OEMs like TELCO, Ashok Ley-

land, and Mazda are often seen with Goodyear tyres. Goodyear commands a major mar-

ket share in the Off The Road (OTR) segment by being a major supplier to Coal India

Limited, Escorts, L&T, TISCO and major steel plants of the country.

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2004: A very significant year with three product launches including GT3, Eagle F1 and

Ducaro GA.

2006: Launch of branded retail “shop-in-shop” concept – a part of the company’s stra-

tegic initiative in organized tyre retailing, aimed at strengthening its presence in the large

tyre replacement market in the country. These outlets will offer customers an unmatched

tyre purchase experience.

Goodyear India rolls out the Excellence series – a new collection of luxury pas-

senger car tyres. Designed with the ultimate '3 -Zone Technology', and ECO-Sil Silica

Tread Compound Technology, the tyre provides superior comfort and precise handling on

both wet and dry conditions for premium car drivers

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MRF: -

MRF ltd was established in 1960 manufacturers automobile tyre in collaboration

with mans field tyre and rubber company U.S.A. MRF becomes the largest manufacturer

in 1993 with a turnover of Rs 1500crore. The company makes automotive tyres conveyor

belts tubes leather products and surface coaching. It was the largest producer of tyre in

each and every segment in 1995-1996. MRF enjoys high brand equity as well as a very

good reputation both between consumer and dealers. Today MRF has a vast network

spanning 3000 dealers across India around 50 to 100 new dealers joining up every year.

Today the company spends about Rs 40 crorers on advertising, which revolves

around strengths and the vision of its pneumonic the mrf muscleman.

A special factory dedicated entirely to the manufacture of radials is being built up

at Pondichery, MRF tyres were also chosen for fitment on the ford opal and feat uno

further proofs its superior quality. MRF TYRES, India's No. 1 tyre manufacturing

company manufactures an extensive range of superior quality tyres in six production

facilities in India. MRF exports its products to over 75 countries worldwide. The

company established its first office in 1949 at Chennai, Tamil Nadu, India.

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DUNLOP INDIA: -

Dunlop world wide had been at the fore front of every development of pneumatic

tyres, which is the actual name of tyres we use for 100 years after 100 years of

establishment Dunlop tyre group is a global network, fully geared to meet the growing

needs of the world market. Today Dunlop has the size economies and scale that enable it

to invest in research and development and in modern facilities to manufacture products of

highest quality. It has got technical collaboration with sumitomo rubber industries Japan

Dunlop ltd U.K. currently under take over of Mr. Chhabria. Dunlop Tyres is the sole tyre

supplier to British Touring Car Championship for 2003 to 2006 and the V8 Super cars

Championship from 2002 to date. Dunlop also supplies tyres to the Deutsche

Tourenwagen Masters and the American Le Mans Series.

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CEAT LTD: -

Set up in 1958 management under R.P. Goenka, technical collaboration with

Yokohama rubber company Japan. Ceat ltd enjoys a market share of about 20%. It has

found its position amongst the top manufactures in the country. It has manufactured a

wide range of tyres and boosts of capacity utilization of 55%. It is the second largest car

tyre manufacturers in the world with a turn over of $322million. The company also

exports a range of tyres to over 130 countries. EAT has a wide distribution network of

over 3500 dealers, 33 regional offices and more than 100 C&F agents. The company’s

manufacturing plants are located in Mumbai and Nasik.

CEAT manufactures largest range of tyres in the industry which incorporate both cross-

ply and radial technology. The range of tyres covers virtually all user segments – from

giant earthmovers to specialty tyres for scooters and motorcycles. The company also

markets tubes and flaps.

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APOLLO TYRES: -

Set up in 1972 in Karla by industrialist Raunaa Singh with technical collaboration

with general tyre international. Apollo is one of the fastest growing tyre companies in the

world. Its strength lie in its aggressive marketing and this is reflected in sales growing of

over 30% per annum for the last 5 years, the company produced truck lcv passenger car

tyres. Apollo is tied up with s Kumar’s to manufacture-2 wheeler tyre to sell under the

Apollo brand name Apollo is among top three manufacturers in the country and in 1995 it

was 16th amongst the top 25 tyre manufacturers in the world with a turn over of about

$376million. The Group's principal activities are to manufacture and sell automobiles

tyres, tubes and flaps. It operates through its subsidiaries namely, Apollo Mauritius

Holdings Pvt Ltd, Apollo Tyres AG, Apollo South Africa Holding Pty Ltd, Apollo Tyres

Pt Ltd, Apollo Tyres Nigeria Ltd, Apollo Tyres South Africa Pty Ltd, Dunlop Africa

Marketing United Kingdom Ltd, Apollo Tyres GmbH and Apollo Tyres Zrt. The Groups

plants located in Kerala and Gujarat. The Group operates in India, South Africa and

Internationally.

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CAHPTER 3 : PRODUCT

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3.1 PRODUCT AND SERVICES

` J.K. Organization has very diversified manufacturing activities such as Synthetic

Fibres like: Nylon, Polyester, Acrylic; Paper & Boards; Cement; Automobile Tyres &

Tubes; Cotton, Woolen and Jute Textiles; Engineering; Plastic Processing;

Agrochemicals; Hybrid Seeds; Cosmetics; Audio & Video magnetic tapes; Power

transmission including V-Belts and conveyor Beltings, Automotive Belts, Oil Seals;

System Engineering, Industrial, Electronics and Material handling systems, etc.

The group is further diversifying in other fields like Petrochemicals, steel, Drugs

& Pharmaceuticals, Food & Dairy Products, Electronics, Computer Software, Power

Generation, Rubber hoses, etc. The Group exports number of products including Jute

Textiles, Woolen textiles, Readymade Garments, Engineering files, Tyres and Tubes,

Synthetic Fibres, Paper, Marine products, Spices, etc. The entrepreneurial, managerial

and technical expertise available within the J.K. Organization has enabled it to establish

and operate several projects in India and abroad.

Most of the industries promoted and established by J.K. Organization are today the

leaders in their product lines in India. The success of a manufacturing enterprise depends,

especially in a competitive consumer product line, on the efficiency of its manufacturing

and marketing organization and more so in India where the marketing activities have to

be very competitive. In fact, the success of J.K Group of companies is based primarily on

the latest technology, innovation,

and continuous Research & development policies as also on its effective marketing set-

up, which is involved on a sustained basis in:

Maintaining continuous touch with the customer,

Identifying the needs of the consumer,

Establishing effective channels of distribution,

33

After-Sales Service and consumer satisfaction.

J.K. Organization has well-established necessary infrastructure and capabilities to

market a very wide range of products, which include core sector industrial products,

engineering products, consumer goods, agrochemicals, etc.

To cater to the needs of the various consumers for the goods manufactured by the

group and to provide prompt delivery and services, as, when and where required, the

organization has established:

Over 50 well-equipped branch offices all over the country for distribution, control

and monitoring product lines;

Four Zonal Offices at:

1. New Delhi

2. Mumbai

3. Calcutta and Kanpur

To support and monitor the branch offices.

Network of over 5,000 distributors and retailers for distribution and sales

promotion of different products.

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Besides the above, the Group has established, wherever required, number of show rooms

for retail trade as in case of woolen Textiles. The large distribution network has enabled

the Group to enter very successfully into many competitive lines of manufacture such as

Paper, Cement, Automobile Tyres & Tubes, Synthetic Fibres, Agrochemical, Cosmetics,

etc. The Group enjoys high reputation for the quality of their products and has been able

to capture reasonably high share of the market within a short time.

The group has in-house setup for handling, advertising, market service, sales

promotion, supply/demand forecast, government liaison and coordination supported by

some of the leading outside marketing and advertising agencies and arrangements with

diverse media and publicity channels like newspapers, magazines, financial weeklies,

cinema slides, commercials on TV etc., depending on the type of product.

J.K. Organization is highly competent and eminently suited to promote and

operate industrial enterprises as also plantations. It offers Entrepreneurial, Commercial,

Managerial and Technical expertise for launching new projects right from concept to

commissioning, which would include:

Identification and development of new projects

Selection of Technology

Preparation of Feasibility Reports

Arranging Basic and Detailed Engineering of the Projects

Procurement and Inspection of Equipment & Machinery

Training of personnel

Erection and commissioning of Plants

Running and Management of the Plants

Social & Welfare Activities

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J.K. organization, conscious of its social responsibilities and dedication to improving the

quality of life of its people, strives to serve the community in diverse fields of social

welfare. These include promotion of education, religious and ethical values, provision of

medical and modern living facilities and amenities.

Some of the institutions promoted by the J.K. Organization in India are:

J.K. Institute of Radiology and Cancer Research, Kanpur

J.K. Institute of Applied Physics & Technology, Allahabad

J.K. Institute of Sociology & Human Relations, Lucknow

L.P. Singhania Institute of Cardiology, Kanpur

Institute of Digestive & rental diseases, New Delhi (under implementation)

Sir Padampat Singhania Education Centre, Kanpur

Sulochana Devi Singhania Higher Secondary School, Thane, (Maharashtra)

Lakshmipat Singhania Schools at Jaykaypur (Orissa), Jaykaygram (Rajasthan)

and Jaykaypuram (Rajasthan)

Sri Radhakrishna Temple, Kanpur

Sri Dwarkadhish Temple, Kanpur, etc.

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3.2 Marketing Strategy

Strategic thinking is key to the evolution of successful marketing strategies of JK tyre.

This involves the following analyses:

i. Understanding markets: Strategic perspective of the market requires skilful analysis

of the trend and how they affect the market size and demand for the firm’s product.

ii. Finding market niches: Price, service, convenience and technology are some of the

niches in Indian market.

iii. Product and service planning: Analysis of the customer’s promotion of the brand,

both of the firm and competitors, besides an analysis of the situation in which the cus-

tomer uses the product.

iv. Distribution: Structural changes in inventory management, mobile distribution are

some of the key factors that are going to affect the distribution process in the Indian

market.

v. Managing for result: With pressure on costs, prices, and margins, marketers will

have to make effective utilization of every rupee spent in marketing.

Market opportunity of JK:

Identification of market opportunity is critical before the management of affirm takes a

decision to launch or diversify in any product area. This involves analysis of the

following:

Size of the market

Marketing strategies and the extent and quality of services rendered by other firm in

the industry.

Market programmed required to satisfy market wants

Identification of key success factors in an industry and linking them to a firm’s

strengths and weakness

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Market opportunity

a. Size of the market

b. How well the market is served

c. Prospective inches

d. Marketing mix required to succeed

e. Core competencies required

Framework of market opportunity analysis

Size of the market:

Sizes of the market are....

I. Demand analysis: is the core aspect of market opportunity.

II. Segmentation analysis: is the process of dividing the market into homogeneous sub

units.

III. Industry analysis:

Market opportunitySize of the marketHow well the market is servedProspective inchesMarketing mix required to succeedCore competencies required

Demand Condition

s

Market segment analysis

Industry analysis

Competition analysis

Trade analysis

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Industry Analysis - Porter's Model

iv. Competitor analysis: analysis of competition how well the market is served.

Inter Firm Rivalry: LowThe tyre industry in India is fairly concentrated, with the top eight

companies accounting for more than 80% of the total production of tyres

Entry Barriers: High

The entry barriers are high for the tyre industry. It is a highly capital intensive industry. A plant with an annual capacity of 1.5 million cross-ply tyres costs between Rs. 4,000 and Rs. 5,000 million. A similiar plant producing radial tyres costs Rs. 8,000 million.

Bargaining Power of the Suppliers: High

The tyre industry consumes nearly 50% of the natural rubber produced in the country. The price of natural rubber is controlled by Rubber Control Board and the domestic prices of natural rubber have registered a significant increase in recent times.

Bargaining Power of the Buyers: High

The OEMs have total control over prices. In fact, the OEMs faced with declining profitability have also reduced the number of component suppliers to make the supply chain more efficient.

Threat of Substitutes: Low but IncreasingDuring the FY2002, over 1,10,000 passenger car tyres were imported. This constitutes over 2% of total radial passenger car tyre production in the country. However, with the reduction of peak custom duty, the import of tyres is likely to increase.

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3.3 MARKETING MIX

A Marketing mix is the division of groups to make a particular product, by pricing, product,

branding, place, and quality. Although some marketers have added other P's, such as

personnel and packaging, the fundamentals of marketing typically identifies the four P's of

the marketing mix as referring to:

1. Product

2. Price

3. Promotion

4. Place

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Product

A tangible object or an intangible service that is mass produced or manufactured on a

large scale with a specific volume of units. Intangible products are often service based

like the tourism industry & the hotel industry. Typical examples of a mass produced

tangible object are the tyre. A less obvious but ubiquitous mass produced service is a

computer operating system.

Product range:

BIAS

SIZE TYPE

RIB 9.00-2014PR

JET RIB

9.00-2016PR

JET RIB

10.00-2016PR JET RIB

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JET MILES

SEMI

LUG

9.00-2014PR

TRACK TUF

9.00-2016PR

TRACK TUF

10.00-2016PR

TRACK TUF

LUG

NORMAL LOAD

8.25-2014PR JET TRACK

9.00-2014PR JET TRACK

9.00-2016PR JET TRACK

10.00-2016PR JET KING

11.00-2016PR JET KING

12.00-2016PR JET KING

MODERATE

8.25-2014PR JET TRACK

9.00-2014PR JET TRACK

9.00-2016PR JET TRACK

10.00-2016PR JET CLASSIC

10.00-2016PR TRACK 39 & DX

10.00-2016PR TRACK 39 DX

RADIAL

SIZE TYPE

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HEAVY

SUPER HEAVY

LUG

9.00-2016PR JET STEEL-JDH

10.00-2016PR JET STEEL-JDC

11.00-2016PR JET STEEL-JDC

SEMI

LUG

09.00-2016PR JET WAY JUC

10.00R2016PR JET WAY JUC

11.00R2016PR JET WAY JUC

RIB

9.00R2014/16PR JET WAY JUC

10.00R2016PR JET WAY JBR

11.00R2016PR JET WAY JUH

12.00R2018PR JET WAY JUH

Price

The price is the amount a customer pays for the product. It is determined by a number of

factors including market share, competition, material costs, product identity and the

customer's perceived value of the product. The business may increase or decrease the

price of product if other stores have the same product.

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Place

Place represents the location where a product can be purchased. It is often referred to as

the distribution channel. It can include any physical store as well as virtual stores on the

Internet.

Promotion

Promotion represents all of the communications that a marketer may use in the

marketplace. Promotion has four distinct elements - advertising, public relations, word of

mouth and point of sale. A certain amount of crossover occurs when promotion uses the

four principal elements together, which is common in film promotion. Advertising covers

any communication that is paid for, from television and cinema commercials, radio and

Internet adverts through print media and billboards. One of the most notable means of

promotion today is the Promotional Product, as in useful items distributed to targeted

audiences with no obligation attached. This category has grown each year for the past

decade while most other forms have suffered. It is the only form of advertising that

targets all five senses and has the recipient thanking the giver. Public relations are where

the communication is not directly paid for and includes press releases, sponsorship deals,

exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any

apparently informal communication about the product by ordinary individuals, satisfied

customers or people specifically engaged to create word of mouth momentum. Sales staff

often plays an important role in word of mouth and Public Relations.

Broadly defined, optimizing the marketing mix is the primary responsibility of

marketing. By offering the product with the right combination of the four Ps marketers

can improve their results and marketing effectiveness. Making small changes in the

marketing mix is typically considered to be a tactical change. Making large changes in

any of the four Ps can be considered strategic. For example, a large change in the price,

say from $19.00 to $39.00 would be considered a strategic change in the position of the

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product. However a change of $131 to $130.99 would be considered a tactical change,

potentially related to a promotional offer.

The term "Marketing Mix" however, does not imply that the 4P elements represent

options. They are not trade-offs but are fundamental marketing issues that always need to

be addressed. They are the fundamental actions that marketing requires whether

determined explicitly or by default.

3.4 POLICY OF JK TYRES

We the people of JK Tyre will have an organization committed to quality in

everything we do. We will continuously anticipate and understand our customer’s

requirements, convert these into performance standards for our products and services and

meet these standards for our products and services and meet these standards every time.

Full customer satisfaction - both internal and external is our motto.

Quality Management :

ISO 9001: - JK Tyre world’s first tyre company to receive ‘ISO 9001’ certification for its

entire operations in 1995 in one go. Our Quality Management System is completely

integrated into all aspects of our operations.

QS 9000: - JK Tyre the world’s first tyre company to receive Quality Management

System certification ‘QS 9000’, in 1998 for multi location operations. We are using ‘QS

9000’ system as a tool for continuous incremental improvement.

Environment Management System :

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ISO 14001: - JK Tyre recognizes the impact that our business has on the environment

and takes our responsibilities for maintaining harmony with nature. We are the first tyre

company in India to receive ‘ISO 14001’ certification for multi location operations in

1999.

“E-mark” :

JK Tyre is the only Tyre Company in India having the E-mark certification on

their products, a mandatory requirement for exporting tyres to European Markets.

“DOT” (Department of Transport) :

JK Tyre has the DOT certification on its products, a mandatory requirement for

exporting tyres to US Market.

“INMETRO” (Instituto Nacional De Materiologia – Brazil) :

Jk tyres also have the certification from INMETRO a mandatory requirement for

exporting tyres to Brazil (South America). This is a product as well as a system

certification. Also this is a proof of superior quality of JK Tyre and our ability to meet

stringent international standards.

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CHAPTER 4: ORGANIZATIONAL STRUCTURE

47

ORGANIZATIONAL STRUCTURE OF JK TYRE

48

CHAPTER 5: SWOT ANAYLSIS

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SWOT ANALYSIS

STRENGTHS

Very large distribution channel

Reasonable price

Effective employee in JK

Economies of scale due to optimum capacity utilization

Collaboration with Vikrant, know for their technological superiority bringing to-

gether performance, economy, durability and comfort.

Strong financial positions

WEAKNESSES

Less Brand Awareness

Less concern about small car segment

OPPORTUNITIES

A burgeoning work force and growing middle class population

High growth potential for its exports as demand for JK tyre in Europe increasing.

Strong brand image

Being quality oriented rather than quantity oriented

Large product width & line (product mix)

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Indian customers are mainly value buyers demanding a better overall package. JK is

poised in a better position than other players in the market to capitalise on this oppor-

tunity

Entry of new players with newer and better technologies in the small car tyre segment

So many close competitors like Appolo, Birla, Ceat, Modi, Kaizen etc.

THREATS

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CHAPTER 6 : CONCLUSION AND SUGGESTIONS

52

CONCLUSION

It has been found that Bridgestone and MRF is the market leader.

The brand image of JK tyre is less in comparison to is competitors.

JK Tyres occupies a good position in the market but it is still behind Bridgestone

and MRF.

MRF Tyres are most durable tyres.

Radial tyres of JK are competent Radial tyres of JK are competent enough for

heavy load.

The eco friendly tyre named Green tyre manufactured by JK tyres have an

advantage over the tyres manufactured by its competitors.

SUGGESTIONS

Improve customer orientation, product quality in all segments. The company shall

reform its distribution policy.

Prevent discrimination between small dealers and big dealers while providing the

sales promotion schemes and performance rewards and all the dealers should be

treated a like irrespective of their size. For example: MRF and many tyre

companies have equal discounts policies, irrespective of their sizes

The company should communicate with the dissatisfied consumers & dealers who

have quit JK Tyres and try to offer them better products and services.

JK marketing people should regularly interact with customers. At the end

aggressive marketing is required.

JK Tyres can come up with their exclusive dealership in some of the places

which can help in bringing business to the JK Tyres .For instance

1. Pitam Pura (Behind City Park Hotel).

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2. Model Town.

3. Nangloi.

4. Ashok vihar

BIBLIOGRAPHY

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WEBSITES

www.jktyres.com

www.Ceattyres.com

www.mrftyres.com

www.Apollotyres.com

www://money.rediff.com/money/jsp/compare_chart.jsp?

codes=10680006a10680007

www.indiacar.net

http://www.google.co.in

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