Launch of Amaron Automotive Batteries
Section B - Group 5S V Vyas Reddy (13106)
Rajendra Kumar Bansal (13105)Priyanka Sharma (13103)
Mayank Gupta(13093)Davis.N.S (13079)
About ARBL Company
Amara Raja Batteries Limited was started by Ramachandra N. Galla, in 1985
First to manufacture sealed maintenance free valve-regulated lead acid (VRLA) battery for Industrial Applications in India
Market leader with 40% share in stand-by VRLA battery in
India
Largest in Indian Ocean Rim and amongst top 10 in world
Technical collaboration with Johnson Controls
Market Information
Storage Battery
Industrial Battery Automotive Battery
Overall 62% market shareValue of Rs. 160 billion
Replacement segment
Share of market leader Exide is 25%Dominated by local players and other non-branded batteries
Original Equipment Manufacturer
segmentShare of market leader Exide is 90%
What arbl did?
Analyzed market Decided to target replacement segment They worked on following aspects mainly:
Brand Product Distribution Network Promotion
Features Non-corrosive plates High heat resistant technology Low reaction rate due to which consumption of water is
less
Performance Quality Low Maintenance Leak Proof Battery Matches India’s extreme weather conditions
Durability Long Life
Product Differentiation
Style Fluorescent on black Brash and loud ‘in your face’ font
Design Convenient fold down handles Charge indicator Fancy wends, ribbed side walls
100 pit-stops across the country Standard store design Rugged and functional environment inside
the store Distributing products to 7250 retailers Planning to distribute through departmental
stores
Services Differentiation
Promotional Strategies
Humour as a platform for promotion Clay models + animation was used for advertising Hinglish Lyrics to make brand youthful and sporty Innovative field promotion Association with sports events Sponsored Go-Karting competitions Narain Karthikeyan as brand ambassador
Outcomes
Captured 6% of replacement market within 3 years of product launch
By making a mark in the replacement market, the company is also gaining ground in OEM market
Private label’s program to manufacture batteries for other brands
SWOT Analysis
STRENGTHS Positioning(Lasts Long, Really
Long) Features Promotion Strategy Performance
WEAKNESSES No prior experience in
automotive industry
OPPORTUNITIES Highly unorganized replacement
market. Excide is the only major player
with market share of 25%.
THREATS Competition from Exide in OEM
segment Local brands can penetrate
market using cost leadership strategy
Question 1 : When the OEM market is the key segment in the automotive battery industry, why did Amara raja focus on the replacement market?
It was difficult for ARBL to penetrate and gain market share.
Exide was market leader in OEM market with 90% market share.
Where as replacement market was highly unorganized.
Exide was the only major player having a market share of 25%.
There was a scope for better price realization.
QUESTIONS
Question 2 : What should it do to increase market share of replacement batteries?
Make a deal with local dealers, service stations and give them promotional offers
Product - Added Features like Battery life indicatorPrice - Exchange offers for older batteries .Promotion - E-advertisement, automotive magazines
and websites.Provide replacement guarantee and extended
warranty.
Question 3 : In what way does branding help Amara raja to market a low involvement product like automotive batteries?
High brand recall by effective positioning Visibility in the market – branding creates brand
awareness amongst people which will make consumer influence the buying decision in future
Question 4 : What should ARBL do to penetrate the OEM segment?
Segmenting on the basis of Vehicle categories (HMV, LMV)
Customization based on ampere rating
Coordinating with OEM’s internal engineers in order to meet their technical and quality standards in the most cost effective manner