B2B Marketing: MRF’s Strategies and Plans for TAFE

BIM , Trichy

Our Plans for TAFE

To make TAFE our strategic business

partner by being the OEM for Tyres in all Tractor models of

TAFE, in the present and emerging markets

and conditions.

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Micro Factors influencing TAFE

• Mahindra – Strong Network• M&M – Diversification & extensive brand building• Mahindra having finance support “Mahindra Finance”• JD- Superior technology• New Holland coming up with rotovators and accessories• Other players apart from TAFE being flexible in financing with their

network partners• Rising demand for <30 HP and > 50 HP-New players entering this

segment• High interdependence among

all these forces–a critical success factor

Service

Brand Value

Network

Heritage/Legacy

Product

Macro Factors influencing TAFE

Political

• Subsidies• Loan waiver• Govt

expenditure in Infra

• Power generation Capacity

Economical

• Interest Rates• Growth• Inflation• FDI, FII in

Infra• Reducing

duties of imports

Social

• Age• Literacy rate• Income Level• Urbanization• Agriculture

growth

Technology

• Logistic Upgrade

• Multiple usage of tractors

• Design upgrade

• Alternate mode of power

Legal

• Dam Water level regulations

• Patents• Investor’s

contract• Territory

restrictions

Environmental

• Monsoon• Natural

calamities• Land

reclamation

Internal analysis

What TAFE has?

• Legacy• Mileage• Capacity• Volume sales• Market share• Financial resources• Goodwill• Technology from MF

Scope for Improvement

• Brand building• Brand Repositioning• Developing Efficient network• Morale of dealers• Customer Satisfaction• Availability of superior technology• Not an innovator/early adopter• Product-Its functions & Attributes

SWOT

STRENGTHS

1. Partnership with supplier: Long-Term relationship

2. Rich Legacy->Old men’s favorite

3. Huge Cash reserves

4. High Margins

WEAKNESS1. Poor Network2. Weak channel partners3. Brand Image4. Past Practices-(Network).>Brand Image5. Capacity not very high6. Contract->Nuances in contract with Massie

Ferguson7. Not an early adopter/Lack of use of

superior technologies8. Products are not durable/efficient

OPPORTUNTIES

1. Export Markets2. Emerging alternative uses for tractor3. High HP segment4. Low HP Segment5. Replacement Market

THREATS

1. Dwindling brand equity2. Being a Laggard in product development

Porter’s 5 force Model for TAFE

Suppliers

• Number and Size of Suppliers:– the supplier are limited– the major portion of the building cost is the parts

supplied by the suppliers– Switching cost is high

• Unique Service / Product:– Best quality and trusted Suppliers

• Ability to substitute:– Not easy to opt for substitute as the next product in

the assembly line depends upon it

Buyers

• Switching Costs: – switching to another product is simple and cheap– Product is commoditized

• Number of customers/ Volume of sales:– Bargaining power of buyer is high as there are lot

of choice available to the buyer• Brand Image:

– Trusted brand

SUBSTITUTES

• Substitutes performance:– Features available are less– After service delivery

• Buyers willingness:– High due to shift in age old methods of ploughing

bullock cart.– Medium HP might get shifted to high horse power

• Price band:– threat to switch to a substitute product is minimal

COMPETITIVE RIVALRY

• 13 players in Industry• Prevailing from technologically superior & developed

countries such as John Deere, Ford, New Holland etc• Mahindra, PTL are listed companies & focus on high

volume• Strong competitive networks• Mahindra & JD are volume based & focus on

economies of scale• Provides aggressive below the line activities & Brand

building.

New Entrants

• Many Brands like Hitachi, Mitsubishi, Kubotu, Komatsu which are in – Heavy machinery– Less than 30 HP tractors

Other foreign players in same Industry

Our Strategic pitch

• Tractor industry has a fluctuating demand, & we have all the resources (capacity, cash & Raw material availability)to cater to your fluctuating demand

• In a price volatile rubber market, we assure you a fixed tyre price without passing on the price hike. We can do so because we have captive rubber plantations in Indonesia.

• Our tyres are strong in TERRAINS as well as ROADS and we can come up with tyres of different kinds for on – road & off – road purpose, thereby catering to your needs when applications of tractors change

• We have the capability to manufacture tyres for tractors <30 HP to >50 HP , in case if u manufacture such, in future.

• We can come up with a new exclusive tyre brand for TAFE - this would give a competitive edge, POD & first mover advantage for the brand

For

RR MOHAN KUMAR & TEAM, BIM – TRICHY

THANK YOU!!!