strengthening market leadership in russiacmd+russia.pdf · examples of marketing campaigns and...
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S T R E N G T H E N I N GM A R K E T L E A D E R S H I P
I N R U S S I A
A N D R E I P A N T I O U K H O VEXECUTIVE VICE PRESIDENT,
RUSSIA & ASIA
N O V E M B E R 1 3 , 2 0 1 8
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2
• Russia remains an attractive market for Nokian Tyres.
• Nokian Tyres continues to target the profitable A+B segments.
• Our market leadership is strongest ever.
• Our target is to continue outperforming competition.
• We are focusing on key building blocks for future growth.
• Local production in Russia remains a competitive advantage.
• Russia represents several business risks, but we effectively work to mitigate them.
S T R E N G T H E N I N G M A R K E T L E A D E R S H I P I N R U S S I A
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2,90
1,47
1,91
2,65
2,942,78
2,49
1,601,43
1,60
1,84
2,07
2,32
2,60
2,86
3,18
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 f 2019 f 2020 f 2021 f 2022 f 2023 f
New car sales in Russia (million units)
N E W C A R S A L E S I N R U S S I A W I L L G R A D U A L L Y I N C R E A S E …
2012 peak sales expected to be achieved by 2023:
Source: AEB; Nokian Tyres estimates3
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0
5
10
15
20
25
30
35
40
45
50
55
60
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f 2022f 2023f
Car, SUV, van tire replacement market (sell-in volume, million tires) – Basic scenario
C-segment
B-segment
A-segment
… A N D T H E T I R E M A R K E T I S A L S O R E C O V E R I N GGrowth driven by the B-segment
CAGR 2017–2023
Total +6.0%+4.0%+9.1%+5.7%
Source: Nokian Tyres estimates4
Note: market segmentation is based on brands’ relative price positioningand brand image
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19.1
19.3 38.4
3,7
3,3
7,06,2
5,8
12,09,1
10,3
19,4
winter summer total
Russia's estimated 2018 replacement tire market (million units)
A-segment
B-segment
C-segment
W E T A R G E T 5 0 % O F T H E R E P L A C E M E N T M A R K E T …Focusing on winter and summer tires in A+B segments
5 Source: Nokian Tyres estimates
Nokian Tyrestarget segments
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… A N D W E A R E T H E P R I C E L E A D E R I N W I N T E R T I R E SOptimized product range and pricing are key for profitable market leadership
6 Source: Nokian Tyres analysis
Nokian HKPL 9
Nokian HKPL 8
Nokian NORDMAN 7
Nokian NORDMAN 5
40
50
60
70
80
90
100
A-SEGMENT
B-SEGMENT
C-SEGMENT
STUDDED TIRESHKPL 9 = 100
Nokian HKPL R3
Nokian HKPL R2
Nokian NORDMAN RS2
STUDLESS TIRESHKPL R3 = 100
Nokian HAKKA GREEN 2
Nokian NORDMAN SX2
SUMMER TIRES
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30,1
I N 2 0 1 7 , W E R E A C H E D O U R H I G H E S T E V E R M A R K E T S H A R E O F 3 0 % I N A + B S E G M E N T S …
2 0 1 7m a r k e t
s h a r e ( % ) TOTAL
A + B Segment Total Market
WINTER 39,820,2
SUMMER
19,99,2
14,6
Source: Nokian Tyres estimates7
A + B Segment Total Market A + B Segment Total Market
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… A N D W E A I M T O K E E P O U T P E R F O R M I N G C O M P E T I T I O NMain building blocks for future growth
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Successful product
policy
Strongbrand image
Leveragingstrong
distribution
• Leadersh ip in product performance and qua l i ty
• Comprehens ive product portfo l io
• Optimized pr ice pos it ion ing w ith in and across A+B segments
• Best t i res for a l l condit ions
• Ult imate choice by consumers
• High brand awareness and intent to buy
• Brand promotion through effect ive creat ive so lut ions
• Close partnersh ip w ith d istr ibutors
• F lex ib le f inanc ia l terms• Effect ive support of
se l l -out• Mult i - channe l
d istr ibut ion structure• Upgrade of on l ine
so lut ions
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• Professional tire retail• Hakka Guarantee
network of ~2,900 POS• Controlled / franchised
tire retail• Vianor 328 shops• N-TYRE + NAD 130 shops
• Web-shops
Tire retail
• Integrated wholesale / retail operations
• Federal retail chains with active online presence
• Regional or federal wholesale operations
W E H A V E A M U L T I - C H A N N E L D I S T R I B U T I O N N E T W O R K …
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Official distributors
• Car manufacturers (> 20)• Loose winter tires and
complete wheel programs• Car dealers
• Total ~ 3,100 POS
Automotive
• Taxi operators• Federal and regional-scale
companies with own fleet• Leasing companies• Car sharing operators
Corporate Fleet Customers
C O N S U M E R S
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… S U P P O R T E D B Y V E R S A T I L E D I S T R I B U T I O N M O D E L S
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Uncovered territories
Official distributors
Direct sales and distribution (all channels)
Direct sales and distribution (car dealers)
Regional warehouses
Vsevolozhsk factory
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W E P R O V I D E E F F E C T I V E S E L L - O U T S U P P O R TExamples of marketing campaigns and actions
Marketing program for consumers to drive sell-out in selected professional tire retail
Effective marketing tool to support price positioning
Autumn 2018 – 250 joint campaigns with partners(~700 retail shops)
Seasonal advertising support for VIANOR & N-TYRE retail brands, including promotion of VIANOR.ru marketplace
Extended Guarantee for Nokian Tyres products to support sell-out (free repair or replacement of damaged tire)
~ 2,900 POS participate in program Over 700 Authorized shops to
provide service
Hakka Guarantee Discounted tire mounting Franchising support
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Comprehensive web platform for business-to-business customers
Currently covering over 95% of all incoming customer orders
P I O N E E R I N G I N D I G I T A L T I R E B U S I N E S S
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Examples of running e-commerce solutions and business models
Own Nokian Tyres web shop for direct sales from the manufacturer to end consumers
Sustainable, flexible and user-friendly marketplace aligned with business needs of Vianor partnersand preferences of online consumers
B2B B2C vianor.ru
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ONE OF THE MOST EFFICIENT TIRE FACTORIES IN THE WORLD
L A R G E - S C A L E P R O D U C T I O N I N R U S S I A K E Y C O M P E T I T I V E A D V A N T A G E
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ANNUAL PRODUCTION CAPACITY
OPERATION IN FOUR12-HOUR SHIFTS330 DAYS A YEAR
HIGHEST QUALITYLEVEL
PERSONNEL ~1,600 PEOPLE
EXPERIENCED TEAM OF HIGHLY QUALIFIED PROFESSIONAL EMPLOYEES
VERY HIGH
COMPLEXITYOF PRODUCTION 100 xx
24/7
17 MILLION TIRES
THE LARGEST EXPORTEROF CONSUMER GOODS IN RUSSIA
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W E L L P O S I T I O N E D T O R E D U C E R I S K
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Business risks Action
Market risks: a new economic crisis leading to the deterioration of consumers’ disposable incomes and demand
Wide product range covering all segments: switch to cheaper segments in case of weak demand
Credit risks: potential bankruptcies of distributors, fraud
Flexible financial terms with distributors’ stock audits
Ban of import of tires from Russia to US and/or the EU
Lobbying in the US to ensure that ongoing investment project is taken into account in decision-making
Business interruption risks due to the actions of Russian authorities: counter-sanctions, import/export restrictions, official checkups
Close cooperation with the Russian authorities on all levels; pro-active support of their initiatives; compliance with legislation
Technical regulation risks: adoption of unfavorable standards & regulations
Lobbying, pro-active participation in technical regulation development and adoption
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• Russia remains an attractive market for Nokian Tyres.
• Nokian Tyres continues to target the profitable A+B segments.
• Our market leadership is strongest ever.
• Our target is to continue outperforming competition.
• We are focusing on key building blocks for future growth.
• Local production in Russia remains a competitive advantage.
• Russia represents several business risks, but we effectively work to mitigate them.
S T R E N G T H E N I N G M A R K E T L E A D E R S H I P I N R U S S I A
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S T R E N G T H E N I N GM A R K E T L E A D E R S H I P
I N R U S S I A
A N D R E I P A N T I O U K H O VEXECUTIVE VICE PRESIDENT,
RUSSIA & ASIA
N O V E M B E R 1 3 , 2 0 1 8