INTRODUCTION

MRF Ltd., incorporated in 1960 to take over the business of the

Madrass Rubber Factory, MRF later its ent public in 1961. !he co"pany has orks at !iruvottiyour, #rakkona", "edak, kottaya" and $oa. !he

%o"pany "anufactures tyres and tubes in collaboration ith Mansfield tyres and Rubber, &'. (ts products include )ylo*rip. +i*"a, !yredro"e, etc. (ts subsidiary co"panies are Funskool (nternational. MRF diversified into conveyor belts in collaboration (taly, in 1991/60, tied up ith .ierelli, ,(ndia-, MRF %orp and MRF

ith 1apocure, #ustralia, to "anufacture

polyurethane paint for"ulations and later into tyre "achines in collaboration ith #be2, &'. (t also diversified into speciality surface coatin*s, conveyor belts and leather. MRF is plannin* to take over 3unlop, hich is a 4(FR co"pany. (t

has undertaken a study to e2a"ine 3unlop5s operations before fir"in* up its stand on the issue,. MRF is to e2tend support to the "anufacturers, includin* investin* in like "oulds and to finali6e a proposal for ith the (#F in consultation develop"ent of area tyres for different aircraft

ith 3$#7# , 3irectorate $eneral of #ir 7uality #ssureance.- (t has launched a steel/belted pre"iu" radial ty8re variant called MRF +1!'5. 8hile this tyres au*"ents the co"pany5s overall ran*e of radials, it also "arks a step for ard in ter"s of technolo*y, perfor"ance and superior ride 9uality, +1!' in available in "ore than 11 si6es to fit all Maruti vehicles and Fiat, $M, For, :onda, :yundai, Mitsubishi and 3ae oo cars, +1!' 9

has been develope;d especially for (ndian road conditions. (t has beco"e an ori*inal e9uip"ent supplier of radial tyres to !ata (ndica,. MRF has been selected as one of (ndia5s !op 10 co"panies for the si2th consecutive year by the Far <astern <cono"ic Revie 5s annual = Revie 000>.

More than 1,?00 o ners of 08 different vehicle "odels participated in the 000; study, hich as fielded fro" @une to #u*ust, 000A.# ne "odel of custo"er satisfaction "easure"ent as deployed for 000;. Bverall tire

perfor"ance is assessed on 00 attributes, *rouped into five predefined factorsC ride, handlin*, traction, durability, and appearance. # desi*n and 9uality built for heavy overloadin* conditions, have proved to be ideal for operations in 4an*ladesh MRF tyres have earned the reputation of bein* the best suited tires for 4an*ladesh and are preferred by transport operators for their cost effectiveness. 8ith the settin* up of its ne sho roo" in 3haka, MRF "oves closer and ill help to service its custo"ers in 4an*ladesh better. MRF clai"s that it has launched the broadest radial car tyre ever to be "anufactured in (ndia. MRF +1RL, the 06?DE0 Ri ?/si6e radial tyre, has been tested and approved by Ford5s international standards. !hese broad MRF tires co"e as 100 per cent fit"ent on the Ford <ndeavour, says a release fro" the co"pany. !hese tires co"pete pre"iu" radial, adds.> 10 ith i"ported brands, hich ere the only tires available in (ndia in this se*"ent until recently. !his is a hich can also be fitted on 'corpio and 'afari vehicles, ithout necessitatin* the chan*e of B< ,ori*inal e9uip"ent- ri"s, the release

&nlike past years, the study deals only ne passen*er vehicles sold in (ndia are no .o er said.

ith radial tires, as nearly all fitted ith radial tires,> @3

MRF !FR<' has been selected as one of the (ndia5s !B. 10 co"panies for the si2th consecutive year by the far <#'!<R) <%B)BM(% R<1(<85' #))&#L =Revie G.(t is presently under the leadership of #run Ma""en, son of the late H.M. Ma""en .apillae. MRF has today taken the path of self/reliance and successfully developed indi*enous technolo*y to produce satisfaction orld class tires MRF received the hi*hest ratin*s in the study in four of the five factors deter"inin* overall ith tiresC appearance, durability, traction, and handlin*. 4rid*estone, @H !yre, and $oodyear follo ed MRF in the rankin*s. Maintenance of hi*h 9uality standards and constant innovation has beco"e synony"ous ith the or*ani6ation, *ivin* all its products the uni9ue status of hi*hest brand preference solely due to their superior 9uality, perfor"ance and durability. MRF has on the @.3..o er #sia .acific 'tudy I'tudy based on a total of 0?00 ne / vehicle o ners of 11 "akes and A1 different vehicle "odels in (ndia.J for ?years/000;,000?,0006,000E,0008 in Eyears.!his is the trust that drives MRF to raise the bar of 9uality and perfor"ance year after year.

11

HISTORY

10

!he MRF L(M(!<3 factory K Re*d. Bffice is situated at 10;, $rea"s Road, %hennai/600006. !he co"pany5s perfor"ance in past fe years can be described as follo sC

1946 # youn* entrepreneur, H. M. Ma""en Mappillai, opened a s"all toy balloon "anufacturin* unit in a shed at !iruvottiyur, Madras ,no %hennai-.

1949 #lthou*h the =factory5

as Lust a s"all shed

ithout any "achines, a

variety of products, ran*in* fro" balloons and late2/cast s9ueakin* toys to industrial *loves and contraceptives, %hennai-, !a"il )adu, (ndia. 1952 MRF ventured into the "anufacture of tread rubber. #nd ith that, the first "achine, a rubber "ill, rubber "anufacture, i"a*ined possible. 1955 MRF soon beca"e the only (ndian/o ned unit to "anufacture the superior e2truded, non/bloo"in* and cushion/ backed tread/rubber, enablin* it to co"pete ith the M)%5s operatin* in (ndia at that ti"e. as installed at the factory. !his step into tread/ had as later to catapult MRF into5 a lea*ue that fe ere produced. 3urin* this ti"e, MRF established its first office at AA;, !ha"bu %hetty 'treet, Madras ,no

1956 !he 9uality of the product "anufactured

as of such

L a hi*h standard that by the close of 19?6, MRF had beco"e the L "arket 1A

leader

ith a ?0M share of the tread/rubber "arket in (ndia. ithdra fro" the tread rubber business in

'o effective as MRF5s hold on the "arket, that the lar*e "ultinationals had no other option but to *radually (ndia. 1961 !he 9uality of the product "anufactured as of such a hi*h standard ith a ?0M as MRF5s hold on

that by the close of 19?6, MRF had beco"e the "arket leader share of the tread/rubber "arket in (ndia. 'o effective the "arket, that the lar*e "ultinationals had no other option but to *radually rubber business in (ndia. ithdra

fro" the tread

1963 !he 9uality of the product "anufactured

as of such a hi*h standard ith a ?0M

that by the close of 19?6, MRF had beco"e the "arket leader

share of the tread/rubber "arket in (ndia. 'o effective as MRFs hold on the "arket, that the lar*e "ultinationals had no other option but to *radually ithdra fro" the tread rubber business in (ndia.

1964 !he 9uality of the product "anufactured

as of such a hi*h standard ith a ?0M

that by the close of 19?6, MRF had beco"e the "arket leader

share of the tread/rubber "arket in (ndia. 'o effective as MRFs hold on the "arket, that the lar*e "ultinationals had no other option but to *radually ithdra fro" the tread rubber business in (ndia.

1;

1967 MRF beca"e the first (ndian co"pany to e2port tyres to &'# / the very birthplace of tyre technolo*y.

1973 MRF scored a "aLor breakthrou*h by bein* a"on* the very first in (ndia to "anufacture and "arket )ylon tyres passen*er tyres co""ercially .

1978 MRF developed the MRF 'uperlu*/E8, a sturdy tyre for heavy/duty trucks. !he tyre as a si*nificant i"prove"ent over its e2istin* products, and ent on to beco"e the country5s lar*est sellin* truck tyre in later years. 1979 MRF developed the MRF 'uperlu*/E8, a sturdy tyre for heavy/duty trucks. !he tyre as a si*nificant i"prove"ent over its e2istin* products, and ent on to beco"e the country5s lar*est sellin* truck tyre in later years. 1980 MRF entered into a technical collaboration !yre %o"pany of &'#, i"prove"ent and ne hich as involved ith the 4.F. $oodrich

ith the develop"ent of tyres

for the )#'# space/shuttle. 8ith this be*an a si*nificant e2ercise in 9uality product develop"ent. MRF took a "aLor policy decision to be a**ressive on the racin* circuits.

1983 MRF be*an a rapid product develop"ent pro*ra""e for ne enterin* (ndia.

vehicles

1?

1984 'ales crossed ()R t o billion. MRF tyres

ere the first tyres selected

for fit"ent onto the Maruti 'u6uki 800 / (ndia5s first s"all, "ode" car. 1985 MRF )ylo*rip tyres for t o/ heeler vehicles ere launched.

1986 MRF MRF also

as selected by the )ational (nstitution of 7uality #ssurance for orld ide, on si2 7uality ("prove"ent # ards instituted by the 4.F.

their "ost presti*ious a ard. .itted a*ainst 00 tyre co"panies $oodrich !yre %o"pany fro" &'#.

1987 MRF crossed the ()R three billion "ark and also beca"e the )o. 1 tyre co"pany in (ndia. MRF Le*end, the pre"iu" nylon car lyre introduced. 1988 !he MRF .ace Foundation as set up, ith international pace bo ler, as

3ennis Lillee as its 3irector. )ot lon* thereafter, pace bo lers trained at the Foundation ere selected for the (ndian %ricket !ea". 1989 4y 1989, MRF as the clear "arket leader in every lyre se*"ent. Bnce a*ain, in reco*nition of e2cellence, MRF as a arded the 1isvesvaraya # ard for the 4est 4usiness :ouse in 'outh (ndia and the <cono"ic !i"es :arvard 4usiness 'chool # ard for the 4est %orporate .erfor"ance. MRF collaborated ith :asbro (nternational &'#, the orld5s lar*est toy "akers, and launched Funskool (ndia. !he co"pany also entered into collaborations ith 1apocure, #ustralia to "anufacture polyurethane paint for"ulations and ith .irelli for M&'%L<FL<N %onveyor K <levator 4eltin*. MRF ith the MRF 8orld launched the MRF +($M# %% Radial synchronisin* 16

'eries %ricket !ourna"ent for the @a aharlal )ehru !rophy sposered by the co"pany. !he %hief. Minister of !a"il )adu, 3r. M. Harunanidhi, a arded MRF the 'pecial <2port # ard. MRF also opened the MRF !yredro"e, (ndia5s first tyre co"pany/ o ned %hennai-. 1990 MRF brou*ht the 6th 8orld %up 4o2in* %ha"pionship to Mu"bai / the first of its kind / ith A9 countries participatin*. !he event as telecast live on !1 net orks orld ide. 1993 H. M. Ma""en Mappillai as a arded the .ad"ashri # ard of heel care co"ple2 at Madras ,no

)ational Reco*nition for his contribution to industry / the only industrialist fro" 'outh (ndia to be accorded this honour until that ti"e. MRF also beca"e the first tyre co"pany in (ndia to cross the ()R 10 billion "ark. (n addition, the co"pany as voted by the Far <astern <cono"ic Revie , as one of the ten leadin* %orporate $roups in (ndia and a Leader in #sia. MRF as selected as one of (ndia5s "ost ad"ired Marketin* %o"panies by the readers of the # K M "a*a6ine. 1995 !he co"pany5s turnover crossed ()R 1? billion. MRF fit"ent on the 3ae oo %ielo. !his year too MRF as chosen for

as voted by the Far

<astern <cono"ic Revie as one of the 10 leadin* (ndian %o"panies.

1996 radials

(n the $olden @ubilee year, MRF5s turnover crossed the ()R 00 as started at .ondicherry. MRF !yres ere also chosen for fit"ent

billion "ilestone. # special factory dedicated entirely to the "anufacture of

1E

on the Ford <scort, Bpel #stra and Fiat &no. Further proof of its superior 9uality.

1999

MRF

as

declared

the

"ost

ethical

co"pany

by

=4usiness 8orld> "a*a6ine in its survey.

2000 MRF5 launched the '"ile ca"pai*n on (ndian roads.

2002 MRF5s turnover crossed ()R A0 billion "ark. 2004 MRF on @.3. .o er #sia .acific study alon* ith

4rid*estone for the custo"er satisfaction. Mrf Ltd. has infor"ed the <2chan*e that at its "eetin* held on 3ece"ber 19, 000A the. 4B3 have re/ desi*nated Mr. #run Ma""en as Mana*in* 3irector of the %o"pany #pril 01, 000;. 2007 MRF received the hi*hest rankin*s in the study in four of the five factors deter"inin* overall satisfaction durability, traction and handlin*. !ies up "otorsports in (ndia. 2009 MRF Ltd launches pre"iu" truck tire 'uper Lu* ?0/ F'. !he "ere "ention of the ord GMRF5 is bound to brin* the Muscle"an to the "ind of (ndians. !he soon after MRF be*an "anufacturin* tires. Bver the past years, it has evolved fro" a "ere corporate "ascot to a sy"bol of streanth, 18 ith tyres appearance, ith Maruti &dyo* to boost .e.f

reliability and durability O e"bodyin* the very 9ualities of the tires it represents. !he Robotic "uscle"an introduced in the "id/805s, a si*n of the chan*in* ti"es. :is ne appearance as silent testi"ony. !he "uscie"an5s appearance chan*ed once a*ain in 1996, MRF5s *olden Lubilee year. :e started appearin* in full for", and ca"e to be kno n affectionately as the MRF !yre"an by "otorists across (ndia and 6? countries ride. !hen a*ain in the year 0000 MRF has crossed the ()R A0 billion "ark and fro" that on ards it has on %usto"er 'atisfaction # ard continuosly for five years in seven years of @.3. .o er .acific 'tudy. Recently in 0008 MRF Ltd. Launched a near ran*e of t o tyres called =+apper>. heeler orld ide, ho have co"e to rely on hi" for a safe co"fortable

HISTORY BEHIND THE TRADEMARK

19

!he 4irth of !he M&'%L<M#)

(n the 19605s, the (ndian tire "arket as co"pletely controlled by the

lar*e "ultinational co"panies. #round this ti"e MRF opened a tyre factory at !hiruvottiyur in !a"il )adu. 8ith , ca"e the task of reco*ni6in* an appropriate %orporate 4rand 'y"bolC Bne that ould distinctly represent the %o"pany5s culture, and convey the sa"e to everyone in a country of varied lan*ua*es and cultures. (n this process of developin* su**estions for the sy"bol, so"e enterprisin* e"ployees conducted an infor"al "arket survey, intervie in* people fro" all over the country about their e2pectations fro" a *ood tyre. !he responses ran*ed fro" the "undane to the "ediocre. 4ut one day, a truck driver at a roadside dhaba ,"akeshift eateryso"e here in 8eastern (ndia hit upon the ri*ht idea si"ple state"ent, the "uscle"an as born. hen he said, =# *ood tyre should have all the 9ualities of a .ahai an ,stron* "an->. #nd fro" this

00

COMPANY PROFILE

01

MRF Ltd. (s the first (ndian co"pany to e2port tyres to the &', the very birthplace of tyre !echnolo*y. (t is the first co"pany in (ndia to "anufacture and "arket )ylon tyre passen*er tyres co""ercially. (n 000;, the co"pany5s turnover crossed ()R A0 billion "ark. !he co"pany survey conducted in 1999. Founder %ountry Fear of <stablish"ent (ndustry Listin*s and its codes Re*istered Bffice H.M.Mannen Mappillai (ndia 19;6 as a toy factory !yre Manufcturin* )'<CMRFP 4'<C?00090 10;, $rea"s Road %hennai/600 006 (ndia !el.C Q,91-/,;;-/08090EEE 8ebsite Related 8ebsite Fa2C Q,91-/,;;-/080918;;D0?60 ."rftyres.co" ."rf/e2port.co",MRF <2portas *iven the title of "ost ethical co"pany by G 4usiness 8orld5 "a*a6ine after a

Se !e"# $"% B&$"%'

!ruck D 4us !yres 00

 Li*ht co""ercial,@eep and &tlity 1ehicle tyres .assen*er %ars !yres Bff the road tyres ! o/8heelers !yres Far" 'ervice !yres

MRF I"#e&"$#()"$* )++(,e'

4an*ladesh R69Dk.$reen Road .antha.ath 3haka 100? 4an*ladesh MobileC Q, 880-/1EA000810 </"ailC"rfdhakaSban*la.net. &ntied #rab <"irates

0A

OB-ECTI.ES OF THE STUDY

0;

1. !o study attitude and satisfaction a"on* the consu"er for "rf tyres 0. Jto study and analyse various factors influencin* the consu"er to purchase the "rf tyres A. !o analyse the factors influencin* perception and buyin* ;. Find out effectiveness of advertise"ent ?. !o study atte"pts to find the reach of "rf tyres hich ould help the co"pany in for"ulatin* suitable strate*ies 6. 'tudy also identifies the attitude and preference pf consu"er E. !he study finds the different types used in pro"otion throu*h hich product reaches the end user.

0?

PRODUCTION DEPARTMENT

06

P&)%/,#()" M$"$ e!e"# is concerned ith the ac9uisition K the

use of the physical resources e"ployed in the provision of *oods K services. .roduction Mana*e"ent ill nor"ally be responsible for the ell as responsibility for orkin* "ana*e"ent of inventories , 9uality, the "aintenance K replace"ent of faTilities K schedulin* of activities as in this function location, layout, capacity K "ana*in* of a syste". Mana*ers

ill also nor"ally have so"e involve"ent in the

desi*nDspecification of a product or services process, "annin* prices K "easure"ent perfor"ance .

0E

P&)%/,#()" 0&),e''
=Ra /Material converted into finished product is called as production process.> (nputs are "en, "aterials, "achines, dra in*s, instructions K paper ork. !he transfor"ation process involves operations "echanical to convert inputs into outputs. (t also includes activities that assist conversion. <.*P 1. .lannin* K%ontrol of factor of production. 0. A. ;. ?. 6. E. .rocure"ent of "aterial. Receipt, 'tora*e K issue of "aterial. Material handlin*. (nspection of in/process K parts. #sse"blin* K testin* of product. stora*e of finished *oods.

08

PRODUCTION INFORMATION
RA1 2 MATERIAL
#part fro" bein* capital intensive, the tyre industry is also ra "aterials accountin* for about E0M of the cost production. Labour cost is another si*nificant overhead. !he !yre industry has a narro product ran*e, hu*e operatin* overheads and hi*h break/even levels. !he "aLor Ra "aterials used are natural rubber, nylon tyre cord, "aterial costs for the last three "aterial prices has carbon black, synthetic rubber Ra oil/linked ra

years have been risin* constantly, especially those of rubber and crude "aterials. !he steep rise in ra i"pacted profit "ar*ins of all players. %onsistent rise in "aLor ra "aterials costs ith li"ited pricin* fle2ibility, has resulted in pressure on "ar*ins of tyre co"panies, despite a *ood topline *ro th. %onse9uently, hile the revenues sho ed a healthy *ro th, profitability re"ained depressed. (n fact, so"e of the "aLor tyre co"panies are operatin* at break/even situations. !he follo in* is the brief description of the "aLor ra "aterialsP

09

RUBBER PRICES
(n 000E/08 production and consu"ption of rubber *re 6.0M, respectively, by ?.?M and

hile e2ports increased by ?1.0M ,for the sa"e

period-, on account of the i"balance in the *lobal de"and/supply position. !he avera*e do"estic price of rubber increased by 00.AM, hile the international prices soared by A1.?M in the sa"e period. (n #pril/@une 0006, 3o"estic/Rubber prices increased ?9M y/o/y, the international prices increased E6.6M. )atural/Rubber prices have been continuously on the rise in the international "arkets, ith eather conditions playin* a "aLor role in disruptin* supplies. 3urin* FF06, %hina lost rubber plantations in the :ainan province due to a typhoon in 'epte"ber 000E, follo ed by floods in !hailand and Malaysia in 3ece"ber, the sa"e year. .roduction suffered in "ost rubber/producin* re*ions in (ndia, due to bad "onsoons, hich in turn led to the soarin* of rubber prices. 8ith international natural/rubber prices rulin* hi*h, and (ndia bein* a part of the *lobal "arket, e2ports of rubber fro" the country affected the de"and and supply positionin* in its do"estic "arket. !he *ro th in e2ports is drivin*/up avera*e do"estic prices of rubber. 8ith risin* de"and fro" the !yre sector, the supply situation is e2pected to re"ain constrained in the "ediu" ter". %urrently, rubber prices have depleted to around Rs.80/ levels, but there is hi*h level of volatility and hence, their behaviour is difficult to predict. (f current levels persist, it ould result in better profitability for tyre co"panies. hile

A0

N3*)" T3&e C)&% 4NTC5 F$6&(,7

)ylon tyre cord accounts for around 00M of the total ra "aterial costs. 3urin* 000E/08, the production of )!% fabric declined by 10.0M, hile its consu"ption *re by 9M. !his i"balance in the production/consu"ption pattern has led to a E.?M increase in do"estic )!% prices in 000?/06. !he international prices are "uch hi*her than do"estic rates and have sho n a 1?.0M increase in 000E/08 the price of caprolacta", the "ain feedstock for )!% fabric, increased by 6.0M in the sa"e period. :o ever, the avera*e international anddo"estic prices durin* #pril/@une 0006 ere lo er, by 00M and 18M, respectively, due to carpolactarn prices, hich declined by 10.8 M.

A1

OTHER RA1 MATERIALS8

!he prices of other ra linked to *lobal crude oil prices. !he avera*e do"estic price of carbon black increased by E.EM in0008/09 and the avera*e international prices of both '4R and .4R increased by 16.9M and 1A.;M, respectively, durin* 0008/ 09. 3urin* #pril/@uneB6, the avera*e do"estic price of carbon black increased by 0E.0M and this "o"entu" is e2pected to continue. !he avera*e international prices of both '4R and .4R fell by 10M and 1.;M, respectively, durin* #pril/@uneB6. !he prices are e2pected to be in line ith *lobal oil prices. !he risks K concerns are risin* due to the rise in Ra Material "aterials like carbon black, styrene

butadiene rubber ,'4R- and poly butadiene rubber ,.4R- are closely

prices. !he consistently risin* natural/rubber and crude oil prices.and the resultant increase in petroleu"/based inputs has been posin* a bi* challen*e to tyre operators. (n a "ove to protect their profitability, the players have increased tyre prices by 00M, across cate*ories. :o ever, the continuously risin* trend itnessed in the prices of ra "aterials re"ains an area of concern. !hou*h the rubber prices have co"e do n fro" their peaks of Rs.1 1?, to Rs.80 currently, the trend is very volatile. !yre co"panies profitability ould definitely sho i"prove"ent in the "ar*ins, se9uentially, and if prices re"ain at these levels, ould i"prove. 4ut then, it is hi*hly dependent on the prices of "aLor ra "aterials like Rubber, %arbon 4lack, )!% Fabric,

A0

'4R and .4R, catchin* up

hich are hi*hly volatile. :o ever,

ith sur*in*

auto"obile sales, if de"and for tyres increases "ay provide so"e benefit to the tyre co"panies.

ithout the supply

ith it, then, prices of tyres are likely to increase. !his

AA

FINANCE DEPARTMENT

A;

INTRODUCTION TO FINANCE
FINANCIAL MANA9EMENT is that part of "ana*e"ent

hich
/

is

concerned

"ainly

ith

raisin*

funds

in the "ost econo"ic K suitable "anner. &sin* these funds as

profitability as possible C plannin* future operations K controllin* current perfor"ances K future develop"ents throu*h financial accountin*
,

bud*etin*

statistics K other "eans. (t holds

i"portance as it has an i"pact on al the activities of a fir". (ts pri"ary responsibility is to dischar*e the finance function successfully K it also touches on all other business functions. #ll business decisions have financial i"plications and a sin*le decision "ay financially affect different depart"ents of an or*ani6ation. #ccordin* to :unt 8illia"s K 3onald 'onsP =Finance function is defined as a task of providin* funds re9uired by an enterprise on the ter"s "ost favourable to it in the li*ht of the obLectives of the business>.

A?

#ccordin* to #rcher K #"brosiv,

=Financial Management is the application of plannin* K controllin* functions to the finance function>. !hus, Financial Mana*e"ent is that speciali6ed function of *eneral "ana*e"ent hich is related to the procure"ent of finance K it5s effective utili6ation for the achieve"ent of the co""on *oals of the oranisation.

A6

RESOURCES OF FINANCE
!he Mi*ration research Foundation focuces on receivin* proLect specific fundin*, and efforts are "ade to secure financial support in the re*ions here they conducted. For proLects of particular si*nificance to hen local fundin* is insufficient. !ele"etry units and conservation ,i.e., %ritically endan*ered species and habits- , MRF seeks international support interested parties. !he foundation ill ensure that its proLects are "ana*ed efficiently data retrieval are very costly, and it is critical to secure the support of all

and that its operatin* costs are "aintained at a level no hi*her than 00M of the total operatin* bud*et. MRF is co""itted to focusin* the vast "aLority of its financial and hu"an resources to ards the develop"ent, ill be directed i"ple"entation and co"pletion of scientific research proLects. #ll profits derived fro" trackin* contracts for third party or*ani6ations to ards the foundation5s operatin* costs. !he (R' reco*ni6es MRF as &nited 'tates ?01U ,A- re*istered charity and as a %anadian re*istered charity ith the %anadian %usto"s Revenue #*ency.

AE

SOURCES OF FUNDIN9
415 9):e&"!e"# ith needin* to publicity involvin* a third party,

$overn"ents are faced they sho

they are handlin* the situation in obLective and non/political ork. MRF ill take advanta*e of this

"anner. $overn"ent reali6es that properly done research is e2pensive and desi*nate funds each year for such public need to obtain lon*/ter" fundin* and e2pand the foundation5s reputation for hi*h 9uality scientific ork. 425 C)&0)&$#()"' %orporations are an effective public relations tool, as they de"onstrate the corporation5s active participation in environ"ental protection and *ivin* back to the co""unities in increasin*ly focused on hich they operate. !he *eneral public is this corporate co""unity responsibility. ill be used for

%orporations can feel secure that funds donated to MRF sound scientific research ithout e"otional or political bias. 435

P/6*(, $"% P&(:$#e F)/"%$#()"

!here nu"erous foundations that sponsor conservation research via funds dedicated to individual proLects. 'uch or*ani6ations are i"portant for the support of specific research proposals developed by MRF. For proLects conducted in partnership ith other or*ani6ations, MRF ill arran*e for Loint fundraisin* ca"pai*ns, as proLects ith t o lead partners have *reater

potential for securin* the necessary financial support.

A8

445

C&e$#(:e F/"%(" C$!0$( "'7

!he directors ill develop creative fundraisin* ca"pai*ns to establish ith re*ional

ne

partners and pro"ote continued support fro" current sponsors. #n

e2a"ple of such a ca"pai*n is enterin* into a partnership ideas that pertain to this type of Loint venture. 455

ineries to obtain royalties off the sale of specially labeled ine, if you have

I"%(:(%/$* D)")&'
!he private sector is an i"portant source of fundin* for MRF. (f you

ould like to contribute, please visit our.

:B8 FB& %#) :<L. section to "ake a donation. Four financial

co""it"ent is *reatly appreciated, and fully ta2/ deductible under the applicable la s of %anada and !:< &)(!<3 '!#!<'. &nfortunately, at this ti"e e are only able to accept donations in &.'. or %anadian dollars.

A9

CURRENT SENARIO MRF Li"ited, (ndias lar*est tyre co"pany and the 1?th lar*est tyre
co"pany in the orld. !oday MRF is at its peak, it is the only "arket leader a"on* tyre "anufacturers in (ndia, (ts leadership position, coupled ith a 0;M share in ter"s of revenues. ith its stron* brand recall and hi*h 9uality,

MRF co""ands the price/ "aker status. MRF has a stron* presence in the !K4 se*"ent, the lar*est se*"ent of the tyre industry. (t is the leader in the t oV "otorcyclesin the three/ heeler and tractor cars front and passen*er se*"ent tyres, tractor / and rear ,includin* holds second MRF place has tyres.

e"er*ed as the sole supplier of truck tyres to 1olvo. (t is the lar*est supplier of radial car tyres ,;0M share- to !elco5s (ndica, ith a "onthly supply of 10,000 tyres. !he %o"pany has a distribution net ork of 0,?00 outlets ithin (ndia and e2ports to over 6? countries orld ide. (ndia 1s $lobal !he *lobal tyre "arket currently is esti"ated at &'3 E0 billion hile the (ndian "arket is around Rs. 100 "illion. !he *lobal ith a share of 00M. Bn the "arket is do"inated by $oodyear/'u"ito"o

other hand, the do"estic industry is do"inated by MRF Ltd. 'everal "er*ers and ac9uisitions have characteri6ed the *lobal "arket, in the recent past. %urrent 'cenario .ricin* .

;0

'cenario .ricin* is influenced by the de"and. 'ince the tyre de"and has
not si*nificantly increased in the last one year, "any of the tyre co"panies have surplus stocks. :ence, in the last 0/A "onths the lyre co"panies are offerin* discounts bet een 00 to ;0 percent to car "anufacturers, but the car co"panies are tryin* to s9uee6e "ore discounts. !he cheap i"ports of non/ radial tyres especially fro" %hina, 'outh Horea, @apan, !hailand and (ndonesia, hich sell at very lo prices, have been posin* a challen*e to the ith #'<#) countries, industry. (ndia5s si*nin* of the 4an*kok a*ree"ent

in Bctober 000A, intensified the i"port threat, as this a*ree"ent provided for preferential custo"s duly of 1?M for i"ports fro" %hina and 'outh Horea, alon* ith 'ri Lanka and 4an*ladesh, as a*ainst the standard rate of 00M. !his led to a *ush of i"ported tyres fro" these countries. !he landed price is appro2i"ately 0?M lo er than that of the correspondin* (ndian !ruckDL%1 tyres. ("ports fro" %hina no constitute around ?M of the "arket share. ith any arranty and the life of these :o ever, %hinese tyres do not co"e

tyres is si*nificantly lo er than that of (ndian tyres. (n a "ove to brin* about 9uality control in the lyre industry, the ('( "ark has been "ade co"pulsory for tyres. !his ould effectively rule/out the sale of forei*n tyres and thus result in reduced lyre/i"ports.

;1

H(;e (" T3&e P&(,e'8

!he risin* ra "aterial prices have been the key concern for the tyre

industry, especially due to the lack of pricin* fle2ibility. 'ince the tyre industry is hi*hly co"petitive and price sensitive, players have been very conservative about increasin* the prices. :o ever, after the constant rise in ra "aterial costs, al"ost every player has, in different branches, stepped up their product prices. (n 0006/0E, the avera*e tyre prices have been hiked thrice and the cu"ulative increase in truck K bus tyres is ;.6M, in car nylon is 1.0M and in car radial tyres is ?.1 M, over the sa"e period last year. !he price hikes in 000E/08 have resulted in a cu"ulative price hike of 00M across all cate*ories, by al"ost all players, current price/levels of ra ith MRF an e2ception, hich did not increased prices in @uly B6. %o"bined ith the price hikes, if the ould result in better

"aterials persist, it

profitability for tyre co"panies. !here also e2ists a possibility of tyre co"panies rollin* back the price hikes, since the prices of rubber and oil/ related ra "aterials have co"e do n. :o ever, it is very difficult to predict rubber and other ra "aterial prices. MRF Ltd has infor"ed that the 4oard of 3irectors of the %o"pany at its "eetin* held on Bctober 0?, 00 inter alia, has declared A0M second interi" dividend on the paid/up capital of the %o"pany.

;0

MRF

Ltd.

has

infor"ed

re*ardin*

the

standalone Results for the 9uarter ended on AB/@&)/0008 Ws follo sC )et 'ales of Rs.1 1A A;AD/ for 9uarter endin* on A0/ @&)/0009 a*ainst Rs.99;EED/ for the 9uarter endin* on A0/ @&)/000E )et .rofit D ,Loss- of Rs.;0?0 lacs for the 9uarter endin* on A0/@&)/0009 a*ainst Rs.81E lacs for the 9uarter endin* on A0/@&)/0008.

;A

TECHNOLO9Y
!he tyre industry has evolved fro" the "ore basic cross ply to the "ore sophisticated radial tyres. )ylon cords that i"part lo ei*ht and additional stren*th to the tyres have also replaced %otton piy. )ylon tyre cord accounts for around 00M of the total ra "aterial costs. 3urin* the production of )!% fabric declined by 10.0M, its consu"ption *re hile by 9M. !his i"balance in the production/

consu"ption pattern has led to a E.?M increase in do"estic )!% prices in 000?/06. !he international prices are "uch hi*her than do"estic rates and have sho n a 1?.0M increase in 000?/06P the price of caprolacta", the "ain feedstock for )!% fabric, increased by 6.0M in the sa"e period. :o ever, the avera*e international and do"estic prices durin* #pril/ @une 0006 ere lo er by 00M and 18M, hich declined by 10.8 respectively, due to carpolacta" prices,

M.!his industry is stron*ly linked to the auto"obile sector and is also driven by a*ricultural and infrastructural activity that takes place in the re*ion, as these t o have an i"pact on the transport sector. (n ter"s of technolo*y, radial tyre usa*e has been catchin* up at a 9uick pace in the *lobal "arket. #l"ost all the auto"obile se*"ents have shifted to radial tyres and the usa*e of cross ply is restricted to trucks and buses only. Bn the other hand, in the do"estic "arket, the radial tyres are

;;

4<()$ used only in the passen*er car se*"ent hile the rest of the" still stick to the cross ply variety. !his is because of the lo er price of cross ply and its re/treadability. (n addition, the poor 9uality of roads in (ndia restricts the use of such tyres. Radial !yres are better, as they offer better fuel efficiency, lon*er life and s"ooth "ove"ent on roads, to*ether ith orkin* out to be cheaper in the lon* run. !he level of radialisation in passen*er cars is as hi*h as 90M, but for co""ercial vehicles it is very lo P in !K4, it is only 0M ,*lobally 6?M-. !his trend has not really picked/up pace, "ainly because of poor road infrastructure, overloadin*, poor vehicle "aintenance, hi*h costs involved and the re9uire"ent of radial tyres for re*ular "aintenance, in ter"s of checkin* air pressure, balancin* and reali*n"ent of believes that vehicles sa"e e2tent, as can vehicles heels. #dditionally, the industry ith cross/ply tyres. Radial tyres cost ith radial tyres cannot be overloaded to the

close to 00M "ore than cross/ply tyres ,Rs.0,000 "ore in the case of M:%1 tyres, and Rs.1,?00 "ore in the case of L%1 tyres-. :ence, the B<M,Bri*inal <9uip"ent Manufacturer- se*"ent has not pushed radialisation, as radial tyres "ean an elevated cost of around Rs.10,000 for L%1s ,? tyres-, Rs.1;,000 for sin*le/a2le M:%1s ,E tyres-, Rs 00,000 for double/a2le M:%1s ,11 tyres- and Rs.A0,000 for triple/a2le M:%1s. :o ever, *oin* for ard, ith the i"prove"ent in the 9uality of hi*h ays, e e2pect radialisation to *ather.

;?

'o"e "o"entu"P levels of radialisation in M:%1 is predicted to be 10M in five years ti"e, hile in L%1, around 00M. !he future is e2pected to see "any strate*ic alliances a"on* the do"estic and *lobal players to enable the" to have access to latest technolo*y and e2pand their distribution net ork. # better distribution ill also ensure easy availability. !he introduction of ne er auto "odels ill si*nificantly have a bearin* on the tyres de"and. !he tyre co"panies <9uip"ent tie/up ill also be lookin* for tie/ups ith the ) B<M5s,Bri*inal Manufacturerfor better stability and lon*/ter"

relationship. For instance, the international player 4rid*estone has a ith !atas for supply of tyres for its "odel G(ndica5. ith 4rid*estone has entered the (ndian "arket in association

#ssociated %e"ent %o"panies and has set up a "anufacturin* plant at Hheda in Madhya .radesh. (lyundai5s associate tyre "anufacturer is reported to set up operations at 'riperu"budur, in !a"il )adu. Bther "ultinational tyre co"panies are also likely to enter the (ndian "arket vi6. Michelin ith @.H.!yres and .irelli of (taly, ith 4irla !yres. 'uch arran*e"ents are very essential if one has to re"ain co"petitive. %o"panies are no *ivin* e"phasis to innovation in product and process technolo*y and to operational efficiencies. !he *overn"ent5s e"phasis on i"provin* the road infrastructure ill facilitate the road.

!ransport sector that in turn industry in the co"in* years.

ill bri*hten the prospects of the tyre

;6

'everal "er*ers and ac9uisitions have characteri6ed the *lobal "arket, in the recent past. !his is essentially to ac9uire technolo*y, *ain ider access to "arkets and be co"petitive. (ndian players are also reen*ineerin* their businesses and lookin* at strate*ic tie/ups in this se*"ent.

;E

HUMAN RESOURCE DEPARTMENT

;8

:u"an Resource Mana*e"ent ,:RM- is the function ithin an or*ani6ation that focuses on recruit"ent of, "ana*e"ent of, and providin* direction for the people ho ork in the or*ani6ation. Flippo5s definitionC =(t (s a process of searchin* for prospective e"ployees and sti"ulatin* and encoura*in* the" to apply for Lobs in an or*ani6ation.> !hus the purpose of recruit"ent is to locate sources of "anpo er to "eet Lob re9uire"ents and Lob specifications.

F$,#)&' $++e,#(" Re,&/(#!e"#8

1. 0. A. ;. ?. 6. E. !he si6e of the or*ani6ation. !he e"ploy"ent conditions in the co""unity here the or*ani6ation is located. !he effects of past recruitin* efforts hich sho the or*ani6ation5s ability to locate and retain the *ood perfor"in* people. 8orkin* conditions, salary and benefit packa*es offered by the or*ani6ation. Rate of *ro th of the or*ani6ation. !he future e2pansion and production pro*ra"s. %ultural, econo"ic and le*al factors. :o ever these factors "ay be divided specifically as (nternal and <2ternal factors.

;9

I"#e&"$* F$,#)&'8
1. 0. A. ;. ?. Recruit"ent policy of the or*ani6ation :u"an resource plannin* strate*y of the co"pany 'i6e of the or*ani6ation and nu"ber of people e"ployed %ost involved in recruitin* e"ployees $ro th and e2pansion plans of the or*ani6ation

E<#e&"$* F$,#)&'8
1. 0. 'upply and de"and of specific skills in the labour "arket. .olitical and le*al factors like reservations of Lobs for specific sections of society etc

S#e0' )+ $ Re,&/(#!e"# P&),e''8

.ersonnel recruit"ent process involves five ele"entsC 1. 0. A. ;. ?. # recruit"ent policy # recruit"ent or*ani6ation # forecast of "an5po er !he develop"ent of sources of recruit"ent 3ifferent techni9ues used for utili6in* these sources K a "ethod of assessin* the recruit"ent pro*ra"

T=e'e +(:e e*e!e"#' MRF U'e' +)& &e,&/(#!e"# 8

1. Recruit"ent .olicyC (t defines the obLective of the recruit"ent and also provides a fra"e ork for the i"ple"entation of the recruit"ent pro*ra". !he policy should be based upon corporate *oals and needs.

?0

!he criteria for selection and preferences should include "erit and suitability. 0. Recruit"ent or*ani6ationC (t is necessary to centrali6e the recruit"ent and selection function in a sin*le office. !his ill brin* about "a2i"u" efficiency and success in hirin*. !his centrali6ed office is kno n as the <"ployee Bffice or the Recruit"ent 'ection. A. Forecast of Manpo erC !his usually specifiesC a, b. c. d. ;. recruit"entC a. (nternal O !his includes personnel already on the payroll ithin the or*ani6ation fills in or is up*raded. b. ?. <2ternal O !hese sources lie outside the or*ani6ation. Methods of Recruit"entC !he possible recruitin* "ethods can be divided into three cate*oriesC a. 3irect O (n this "ethod, rec t>s visit colle*es and technical schools, e.*. (nfosys, the !ata $roup, #ccenture, (4M, 'ie"ens and several other co"panies of an or*ani6ation. 8henever there is a vacancy, so"ebody @obs or Bperations for hich the person should be available.5 3uration of their e"ploy"ent. 'alary to be offered K ter"s of the e"ploy"ent )ecessary factor and e2perience

'ources of Recruit"entC !here can be t o kinds of sources for

"aintain continuous relationship

ith institutions to hire

students for responsible positions. ?1

b.

(ndirect O !his involves advertisin* in ne spaper, radio, !1., Lournals etc. #dvertisin* can be very effective if its "edia is properly chosen.

c.

!hird .arty "ethods O !his include use of co""ercial or private pL7y"er aLieoXes, place"ent officials of schools, recruit"ent fir"s etc. Friends and relatives of present e"ployees are also a *ood source fro" pro*ra"s. hich e"ployees "ay be dra n as part of the =4uddy Referral>

?0

MARKETIN9 DEPARTMENT

?A

M$&;e#(" M$"$ e!e"# is a co"pound

"ana*e the entire syste" of "arketin*.

ord

hich "eans to

!he process of ascertainin* consu"er5s needs ,convertin* those needs into product or services K "ovin* the product or services to the end users to satisfy needs of specific consu"er se*"ent ith a e"phasis on profitability ensurin* the opti"u" use of available resources in the or*ani6ation. !oday5s "arket is custo"er oriented oriented. #ll the "arketin* activities are carried out considerin* the custo"er in the "ind. (n order to achieve the "arketin* obLective, it is very necessary to have a clear picture of custo"er5s buyin* behaviour. #ll co""odity "arkets are hetero*eneous, so"e co""odity are never in confor"ity ith each other as far as their nature, habits , testY, interest, inco"e K "ode of purchasin* .'o all custo"ers cannot be satisfied ith the sa"e product. (n order to facilitate the "arketin* of the product , the "arketin* "ana*er divides a "arket into ho"o*eneous sub/sets of custo"er havin* co""on characteristics to serve that sub/set concenterated.

?;

MARKET INFORMATION
#lthou*h the tyre industry faces hu*e co"petition, price K cost pressures and hi*h entry barriers, the chan*in* dyna"ics, !he 6oo"in* auto industry, ith the *ro in* econo"y and the escalatin* auto industry, provide a fillip to the industry. ith sales *ro in* at a %#$R of 1?.8M durin* the 0000/06 period, has driven the *ro th in the tyre industry, keepin* both the B<M and replace"ent de"and buoyant. !he de"and and *ro th for the industry depends on pri"ary factors like overall $3. *ro th, a*ricultural K industrial production and *ro th in vehicle/de"and and on secondary factors like infrastructure develop"ent and prevailin* interest rates. !he total nu"ber of vehicles on the road is constantly s ellin*, on the back of an increase in road transportation, i"ple"ented. !he (ndian tyre industry, co"prisin* of ;0 co"panies ,;E factories- in the or*anised and un/or*anised sectors, can be divided into t o tiersP !ier/( players ,top ? tyre co"panies- account for over 80M of industry turnover containin* a ell diversified product "i2 and presence in all three "aLor se*"ents, i.e. replace"ent "arket, ori*inal e9uip"ent "anufacturers ,B<M5s- and e2ports. !ier/(! co"panies are s"all in si6e, concentratin* chiefly on production of s"all tyres ,for t oV three/ heelers, etc.-, tubes and flaps and the replace"ent "arket. !he industry has a ne*li*ible. hich ould *ain "ore "o"entu" once proLects like the $olden 7uadrilateral and )'<8 %orridor proLect *et

??

Market share in the co""ercial vehicles lyre cate*ory and is around 00M in the t o heeler lyre cate*ory. !he (ndian lyre industry has itnessed a %#$R of E.EM over the last

decade. !hou*h the replace"ent "arket has driven the industry *ro th for a lon* ti"e, the B<M "arket has seen a robust *ro th over the last three years. !he truck and bus "arket is the lar*est se*"ent of the industry, accountin* tonna*e ter"s, *re for appro2i"ately E0M of the industry turnover, in ter"s of value. !yre production, in at a healthy rate of 8.EM in 0008/09 a*ainst hile the li*ht co""ercial vehicle that of 000E/08. !he "ediu" and heavy co""ercial vehicle ,M:%1- lyre se*"ent re*istered a *ro th of E.EM 1;.8M and 1;.EM, respectively. # fe years back the auto industry as slu**ish and so also as the ,L%1- and passen*er car lyre se*"ents re*istered a pheno"enal *ro th of

lyre industry, but there has been a dra"atic shift since the last 0/A years. as the vehicle production has considerably *one up. <cono"ic e2pansion, invest"ents and road develop"ent have all contributed to this increase in de"and for vehicles. !his, in turn, has helped the *ro th in the lyre industry. :o ever, althou*h the lyre industry *re "aterials costs, in ter"s of sales volu"es, profitability has been adversely affected due to a substantial increase in ra hich accounted for 60M of the operatin* inco"e in 0001/ 00, soared to over E0M in 0008/09 :ence, the *ro th in sales volu"es has not really added to the botto" line.

?6

DEMAND FOR TYRES

T=e De!$"% C3,*e 9RO1IN9 ECONOMY
(ncrease in inco"e Level, hi*her dis/ .osable inco"e (ncrease in dern/ and for passen*er cars increase in corner/ cial vehicles de"and increase in of frei*ht "ove"ent de"and increase in ear K tear of tyres creates repla ce"ent de"and for tyres increase in de"/ and for passen*er car tyres increase in de"and fro" B<Ms ,Bri*inal <9uip"ent Manufacturercreates replace/ de"and after about 0;/;8 "onths creates replace "en "ent de"and about 10/18 "onths tyres

?E

INCREASE IN TYRE SALES

E>PLAINATION De!$"% for #3&e' can be cate*orised under four se*"ents /
Replace"ent Market ,RM-, the Bri*inal <9uip"ent Manufacturers ,B<Ms-, <2ports, and the $overn"ent. (n FFB?/06, the replace"ent "arket constituted ;8.EM of tyre sales ,by volu"e-, follo ed by B<Ms at ;0.8M. <2ports constituted 8.0M and *overn"ent sales follo ed by .assen*er cars and !ractor / trailers. !raditionally, the replace"ent "arket has been the "ain *ro th driver for the tyre industry, as also the "aLor se*"ent that consu"es tyresP ho ever, ith the recent escalation in auto sales, B<M de"and too, has been on a substantial increase, thus enlar*in* its share in the sales pie. #uto sales have been *ro in* at a %#$R of 1?.8M durin* 0000/06, for ard, the auto"obile industry is esti"ated to *ro hich has driven the *ro th in the tyre industry, keepin* the B<M de"and buoyant. $oin* at double di*its. !his, in turn, is e2pected to keep de"and, for tyres fro" B<Ms, buoyant. Lookin* at the *lobal rail/to/road car*o scenario, in <urope, road ays have an 8;M share, hile in (ndia, currently, the ratio is A?C6?, ith *ro th in road ays and hich as 60CA8, t o decades a*o. #lso, ith proLects like $olden ould be a further shift ould lead to an ere at 0.AM. #ccordin* to the products, the "a2i"u" tyre sales are in the !ruck K 4us se*"ent,

7uadrilateral and )'<8 *ettin* i"ple"ented, there

in frei*ht "ove"ent, fro" railroad to road ays. !his

increase in de"and for auto"obiles and hence, the B<M de"and for tyres.

Re0*$,e!e"# !$&;e# #) 'ee '/'#$("$6*e &)?#=8

?8

!he Replace"ent Market is one of the "ore sou*ht/after "arkets by !yre players, since the "ar*ins are better, co"pared to those of B<Ms , ho are relatively fe in nu"ber and have a hu*e bar*ainin* po er-. hich co"es fro" e2istin* auto"obiles, has been and is e2pected to do the sa"e, *oin* for ard. Replace"ent de"and,

increasin* for so"eti"e no

Replace"ent of tyres varies across cate*ories, due to different life/spans of tyres, hich depends on reasons like i. ii. iii. iv. Road conditions Load carried 3istance travelled Re/treadin*

!he typical life of truck tyres is ;0,000/;?,000 k"s or, on a *eneral basis, around 10 to 18 "onths. !he replace"ent cycle is relatively lon*er for t o/ heelers and cars, ran*in* any here bet een 0; to ;8 "onths. :o ever, the de"and for radial tyres in cars has further au*"ented the replace"ent cycle.

:ere, it beco"es i"portant to talk about Re/treadin*,

hich is a

pheno"enon of repairin* the outer surface of the tyre in order to increase its life. !he cost of re/treadin* a tyre is around 00/0?M of the cost of a ne tyre. # re/treaded tyre lasts for around 60M of the life of a ne tyre. !hou*h the 9uality of tyre deteriorates on retreadin*, since it is hi*hly econo"ical, it is hi*hly resorted to, especially in the passen*er car se*"ent. (n the L%1D :%1 ,truck- se*"ent, re/treadin* depends on the type of operator. For instance, for a sin*le truck operator that operates over shorter

?9

distances, "ainly on inter/city and intra/state routes, re/treadin* is hi*h. :o ever, the or*anised or lar*e/fleet operators prefer to replace the tyres after an avera*e usa*e of ;0,000/;?,000 k"s. !hese operators do not risk usin* old or re/treaded tyres on lon*/distance trips because breakdo ns costs are i""ense. !he substantial *ro th that the auto and tyre industries have seen in the last fe years is bound to keep the replace"ent de"and hi*h, in ould keep replace"ent de"and further buoyant, the years to co"e. 'i"ilarly, the current *ro th in the auto industry and "ountin* B<M de"and *oin* ahead. !hou*h the replace"ent "arket has driven the industry *ro th for a lon* ti"e, the B<M "arket has seen robust escalation over the last three years. $oin* ahead, B<M de"and is e2pected to be buoyant replace"ent de"and ould also see sustainable *ro th. hile

COMPARISION BET1EEN MARKET SCENARIO OF .ARIOUS TYRES

MRF is the "arket leader a"on* tyre "anufacturers in (ndia, 0;M share in ter"s of revenues. (ts leadership position, coupled ith a ith its

stron* brand recall and hi*h 9uality, MRF co""ands the price/"aker status. MRF has a stron* presence in the !K4 se*"ent, the lar*est se*"ent of the tyre industry, and co""ands around 19M "arket share in the se*"ent. (t is 60

the leader in the t oV three/ heeler se*"ent ,includin* "otorcycles- and tractor front tyres, and holds second place in the passen*er cars and tractor / rear tyres. A00)**) T3&e'4AIL5 MRF T3&e' is the second lar*est player in the (ndian tyre industry, ith $ "arket share of 00M, in ter"s of revenues, and the lar*est player in the !K4 se*"ent, ith around 00M "arket share and 80M of its product here the "i2 co"in* fro" this se*"ent. (t also enLoys a stron* brand recall. #!L derives 80M of its revenues fro" the replace"ent "arket, better "ar*ins co"pared to those of its peers <4(!3# "ar*ins are hi*herP hence, at operatin* levels, MRF !yres has

-K I"%/'#&(e' has a 1EM "arket share, in ter"s of revenue, "akin* it the

third lar*est player in the industry. !he %o"pany ranks first in the M:%1 and .assen*er %ar tyre se*"ents, ith E9M and EM of its product "i2 co"in* fro" these se*"ents, respectively

CEAT
CEAT has a 1;M "arket share, in ter"s of revenues, and is an avera*e player across cate*ories. 68M of its product "i2 co"es fro" the M:%1 se*"ent. (ts leadin* brands in the !K4 se*"ent are Lu* NL, Mile NL and Rib NL, 'ecura in t o/ heelers and For"ula/1 in passen*er radials.

61

(n ter"s of profitability, %<#! has lo er "ar*ins co"pared to its peers, in spite of derivin* 60M of its revenues fro" the replace"ent "arket.

9))%3e$& I"%($7
9))%3e$& I"%($@ ith presence across the *lobe, has $ "arket share ith 00M share in tractor / front

of 6M in the (ndian !yre industry, in ter"s of revenues. (t has $ si*nificant "arket share in the tractor tyres se*"ent, tyres and $ A0M share in tractor / rear tyres. (t derives ;?M of the product "i2 fro" the M:%1 se*"ent and A1M fro" the tractor tyres se*"ent.

F$*,)" T3&e' F$*,)" T3&e' has a 0M "arket share in the tyre industry, and is the
third lar*est player in the t o K three the t oV three/ heeler se*"ent. heeler ,includin* "otorcycle- tyres se*"ent. 86M of the %o"pany5s product/"i2 accounts for "otorcycles and

(f

e vie

the financial perfor"ance of various tyre "anufacturin* afer/thin "ar*ins and any levels. ould hurt the business adversely. #lso,

co"panies, "ost of the" are operatin* at substantial increase in costs

revie in* the balance sheet, the RB%< and RB)8 are at very lo MRF is a little better off, respectively. :ence, invest"ent perspective. 60

!he industry leader, MRF, has an RB%< of 6.EM and an RB)8 of ?.?M. ith RB%< and RB)8 at 10.8M and 1;.8M, e do not find tyre stocks attractive, fro" an

!he industry is definitely set to *ro , but the hu*e co"petition, hu*e buyer po er, pricin* infle2ibility and cost pressures prove as detri"ents. !yre co"panies are operatin* at very thin "ar*ins and their return ratios are also not attractive. Bne can look at tyre stocks but only fro" a tradin* perspective Bn the positive side, it is esti"ated that there ould be a 7ooc ) volu"e *ro th of 10/1;M in 0009/10. !he perfor"ance of the tyre.

6A

industry is linked to the auto"obile and infrastructure sectors, the *ro th of hich is dependent on the .erfor"ance of the econo"y. !he current esti"ated econo"ic *ro th is over 8M. !he continuous thrust bein* placed by the $overn"ent on the develop"ent of infra/structure, particularly roads, a*riculture and "anufacturin* sectors, tyres. %o"panies keep on developin* different si6es and desi*ns to "atch the co"petitor5s products. :o ever, the future is likely to be different since co"panies are investin* in technolo*y. Marketin* too is *oin* to beco"e technolo*y/driven. ould lead to an i"pressive acceleration in the auto"obileV tyre sector, *eneratin* "ore de"and for

6;

E>PORTS
(n 196E, MRF be*an to e2port tyres to &'# / the birthplace of tyre technolo*y. %urrently, MRF !yres are e2ported to 6? countries, includin* &nited 'tates, 'outh #"erica, #frica, Middle <ast, #ustralia and other #sian countries. (n the international "arket, ho ever, MRF Ltd faces "uch better scenario. =#bout A0/;0 per cent of our sales co"es fro" e2ports. !he prices are "uch better in international "arkets,> the MRF %M3 said, pointin* out that international tyre prices reflected the hi*h input costs.MRF has been able to achieve this throu*h its co""it"ent and confor"ity to a level of 9uality that has been accepted not only in (ndia but in E? countries around the orld. 3.M% is the sole a*ent for MRF "otorcycle and three/ heeler tyres in 'ri Lakethe %o"pany has set up shop in 3ubai to tar*et "arkets in the &#< as part of its e2port thrust. Bn the other hand, in tonna*e ter"s MRF has not *ro n "uch due to the slo do n in M:%1 tyre and have recorded a 0.AM *ro th, in the de"and for tyres. <2ports constituted 8.0M in such a ay that sales se*"ent in truck Kbus is 0000,in passen*er cars is 8M,in 1ev it is A 1M.!he *lobal tyre "arket currently is esti"ated at &'3 E0 billion do"inated by $oodyear/'u"ito"o "er*ers and ac9uisitions hile the (ndian "arket is around Rest 100 "illion. !he *lobal "arket is ith a share of 00M. Bn the other have characteri6ed the hand, the do"estic industry is do"inated by MRF Ltd. 'everal

6?

$lobal "arket, in the recent past. !his is essentially to ac9uire technolo*y, *ain ider access to "arkets and be co"petitive. (ndian players are also reen*ineerin* their businesses and lookin* at strate*ic tie/ups in this se*"ent. !he e2port "arket for (ndia has been predo"inantly to the &'# that accounts for nearly A0M of e2ports fro" the country. !hese are "ostly of the cross ply variety. :o ever, of late (ndia5s share in the &' "arket is bein* threatened by %hina and @apan. !hese t o countries are able to offer prices that are lo er than that offered by (ndian "anufacturers. (n addition, these t o nations are lo*istically better placed than (ndia hen it co"es to e2portin* to the &'#. 3o"estic tyre "anufacturers are also facin* threat fro" i"ports fro" %hina and 'outh Horea. !he landed cost of tyres fro" %hina is lo er than the (ndian price by A0M. (n addition, tyres fro" 'outh Horea are i"ported at A0M custo"s duty feelin* the heat. hile fro" other countries the duty levied is A?M. !hus in both cases the do"estic tyre "anufacturers are

66

INTRODUCTION TO PROMOTIONAL ACTI.ITIES

.ro"otion consists of those activities hich are desi*ned particularly hich

to help easy sale of *oods or services to the favourable attention of consu"ers. 'ales pro"otion is one of the part of pro"otional "i2 sti"ulates custo"ers K dealers for the purpose of increase in sales. (t can be defined asP 1. 0. =#n e2ercised infor"ation, persuation K influence>.

='ales .ro"otion includes all the activities K tools of "arketin* hich sti"ulates the tar*et custo"ers for the purpose of

"ana*e"ent

increase in sales volu"e>. (n the above definitions, the "ain the"e is that the sales pro"otion does not include #dvertise"ent, .ersonal 'ettin* K .ublicity, instead these activities are perfor"ed purely on te"porary basis or at certain ti"es 'uch asP 3isplay, Free sa"ples,<2hibition, etc.

6E

PROMOTIONAL ACTI.ITIES
.ro"otion consists of those activities the part of pro"otional "i2 hich are desi*ned

particularly to help the easy sale of *oods .'ales pro"otion is one of hich sti"ulates custo"ersK dealers for the purposes of increases in sales. !here are "any pro"otional activities undertaken by GMRF !FR<'5 so"e of hich are as follo sP RACIN9 A RALLYIN9 MRF tyres are developed in the tou*hest lab kno n to "an.MRF is the pioneer of "aLor racin* in (ndia. !he *ruelin* race track has been laboratory for testin* our tyres. <very MRF tyre desi*ned is the result of a special decisive test,that5 s sheer torture- on the race rally tracks. 'harp turns, abrupt brakin* and strai*ht stretches of stea"in* asphalt. <2cruciatin* conditions. but then only the tou*h can survive, and only the tou*hest in. #t MRF, all this is put to *ood use.MRF5s lyre e2perts and rubber technolo*ists are present at every sta*e, and especially durin* those crucial "o"ents, to study tyre behaviour. MRF5 tyres are "ade to run at speeds e2ceedin* 1?0 k"ph, at hich they are e2posed to e2tre"e conditions of heat and traction. !he "olecular stability of the rubber co"pounds is tested a*ainst severe *ravitational stress. Bur e2perts observe, analyse and *ather rinfor"ation at the dirt track, hich they pass on to RK3 depart"ent. !his is then revie ed used to develop safer, better 9uality tyres, not only for for"ula cars racin* bikes, but also for cars that rou*h it out on the tou*h ()3(#) RB#3' everyday.

68

ACHI.IEMENTS OF MRF achieve"ents

'pecial <2port # ard !op <2port # ard !op <2port # ard !op <2port # ard !op <2port # ard !op <2port # ard CAPE>IL A?$&%' %ertificate of Merit 'pecial <2port # ard !op <2port # ard :i*hest <2port # ard !op <2port # ard 'pecial <2port # ard %ertificate of Merit 'pecial <2port # ard -7D7 P)?e& A'($ P$,(+(, S#/%3 A?$&%' %usto"er 'atisfaction # ard %usto"er 'atisfaction # ard %usto"er 'atisfaction # ard %usto"er 'atisfaction # ard 000A/000; 000;/000? 0006/000E 000E/0008 198E/88 1988/89 1989/90 1990/9A 199A/9; 000?/06 000E/08 0008/09

YEAR
1990/91 1991/90 1990/9A 199A /9; 199;/9? 199?/96

69

%usto"er 'atisfaction # ard

0008/0009

CONCLUSION

E0

MRF !FR<' has been selected as one of the (ndia5s <%B)BM(% R<1(<85' #))&#L R<1(<8.
1.

!B. 10

co"panies for the si2th consecutive year by the far <#'!<R)

!he "arket share of MRF !yres (n 1aranasi "ore then 0?.E? M in Four heeler 'e*"ent,.assen*er %ar Radial-.

2. 3. 4. 5.

#ppro2i"ately 8EM custo"ers are satisfied ith the MRF !yres . Rate of MRF !yres are not hi*h a*ainst ith the other %o"pany tyres. #fter sale service ,%lai"- of MRF !yres is very *ood. #ppro2 80M custo"er said that they MRF !yres very easily henever they re9uire the" fro" the nearest dealer.

6.

#round E?M custo"er said that they purchase MRF !yres fro" the <2clusive dealer of MRF !yres Ltd.

E1

SU99ESTION

E0

STREAN9TH
1. 0. A. <stablished brand na"es ,key in the replace"ent "arket<2tensive distribution net orks $ood RK3 initiatives by top players

1EAKNESS 1. %ost .ressures / !he profitability of the industry has hi*h ith the prices of key ra "aterials such as rubber and

correlation

crude oil, as they account for "ore than E0M of the total costs 0. .ricin* .ressures O !he hu*e ra "aterial costs have resulted

in pressure on the realisations and hence, the players have been vouchin* to increase the prices, althou*h, due to co"petitive pressures, they have not been able to pass on the entire increase to the custo"er A. :i*hly capital intensive / (t re9uires about Rest ; billion to set ith a capacity of 1.? "illion tyres and around

up a radial tyre plant "anufacturin* capacity

Rest 1.?/0 billion, for a cross/ply tyre plant of a 1.? "illion tyre/

EA

OPPORTUNITIES $ro in* <cono"y/ $ro in* #uto"obile (ndustry (ncreasin* B<M de"and/ 'ubse9uent rise in replace"ent de"and 8ith continued e"phasis bein* placed by the %entral $overn"ent on develop"ent of infrastructure, particularly roads, a*ricultural and "anufacturin* sectors, the (ndian econo"y and the auto"obile sectorV tyre industry are poised for an i"pressive *ro th. %reation of road infrastructure has *iven, and ould increasin*ly *ive, a tre"endous fillip to road transportation, in the co"in* years. !he !yre industry ould play an i"portant role in this chan*in* road transportation dyna"ics #ccess to *lobal sources for ra econo"ies of scale 'teady increase in radial !yres for M:%1, L%1 %ontinuous increase in prices of natural rubber, one third of total ra "aterial costs %heaper i"ports of !yres, especially fro" %hina, sellin* at very lo prices, have been posin* a challen*e. !he landed price is appro2i"ately 0?M lo er than that of the correspondin* (ndian !ruckV L%1 tyres. ("ports fro" %hina no constitute around ?M of "arket share. 8ith crude prices scalin* up ards, added pressure on ra e2pected 4an on Bverloadin*, leadin* to lesser ne*ative %yclical nature of auto"obile industry . "aterial prices is hich accounts for nearly "aterials at co"petitive prices, due to

ear and tear of tyresand

subse9uent slo do n in de"and. :o ever, this ould only be a short/ter"

E;

BIBLIO9RAPHY

E?

MARKETIN9 MANA9EMENT8B By Philip Kotler

1EBSITES8B ???7!&+#3&e'7,)! ???7 )) *e7,)! ???7?ee;30e%($7,)!

E6