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INTRODUCTIONINTRODUCTION
8
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MRF Ltd., incorporated in 1960 to take over the business of the
Madrass Rubber Factory, MRF later ent public in 1961. !he co"pany has
its orks at !iruvottiyour, #rakkona", "edak, kottaya" and $oa. !he
%o"pany "anufactures tyres and tubes in collaboration ith Mansfield tyres
and Rubber, &'. (ts products include )ylo*rip. +i*"a, !yredro"e, etc. (ts
subsidiary co"panies are Funskool (ndia-, MRF %orp and MRF
(nternational.
MRF diversified into conveyor belts in collaboration ith ierelli,
(taly, in 1991/6, tied up ith apocure, #ustralia, to "anufacture
polyurethane paint for"ulations and later into tyre "achines in collaboration
ith #be2, &'. (t also diversified into speciality surface coatin*s, conveyor
belts and leather.
MRF is plannin* to take over 3unlop, hich is a 4(FR co"pany. (t
has undertaken a study to e2a"ine 3unlop5s operations before fir"in* up
its stand on the issue,. MRF is to e2tend support to the "anufacturers,
includin* investin* in like "oulds and to finalie a proposal for
develop"ent of area tyres for different aircraft ith the (#F in consultation
ith 3$#7# 3irectorate $eneral of #ir 7uality #ssureance.- (t has
launched a steel/belted pre"iu" radial ty8re variant called MRF +!'5.
hile this tyres au*"ents the co"pany5s overall ran*e of radials, it also
"arks a step forard in ter"s of technolo*y, perfor"ance and superior ride
uality, +!' in available in "ore than 11 sies to fit all Maruti vehicles
and Fiat, $M, For, :onda, :yundai, Mitsubishi and 3aeoo cars, +!'
9
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has been develope;d especially for (ndian road conditions. (t has beco"e an
ori*inal euip"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
10
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&nlike past years, the study deals only ith radial tires, as nearly all
ne passen*er vehicles sold in (ndia are no fitted ith radial tires,> @3
oer said.
MRF !R
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HISTORYHISTORY
1
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!he MRF L(M(!
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leader ith a ?0 share of the tread/rubber "arket in (ndia.
'o effective as MRF5s hold on the "arket, that the lar*e "ultinationals had
no other option but to *radually ithdra fro" the tread rubber business in
(ndia.
1961 !he uality of the product "anufactured as of such a hi*h standard
that by the close of 19?6, MRF had beco"e the "arket leader ith a ?0
share of the tread/rubber "arket in (ndia. 'o effective as MRF5s hold on
the "arket, that the lar*e
"ultinationals had no other option but to *radually ithdra fro" the treadrubber business in (ndia.
1963 !he uality of the product "anufactured as of such a hi*h standard
that by the close of 19?6, MRF had beco"e the "arket leader ith a ?0
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 uality of the product "anufactured as of such a hi*h standard
that by the close of 19?6, MRF had beco"e the "arket leader ith a ?0
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;
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1984 'ales crossed ()R to billion. MRF tyres ere the first tyres selected
for fit"ent onto the Maruti 'uuki 800 / (ndia5s first s"all, "ode" car.
1985 MRF )ylo*rip tyres for to/heeler vehicles ere launched.
1986 MRF as selected by the )ational (nstitution of 7uality #ssurance for
their "ost presti*ious aard. itted a*ainst 0 tyre co"panies orldide,
MRF also on si2 7uality ("prove"ent #ards instituted by the 4.F.
$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 as
introduced.
1988 !he MRF ace Foundation as set up, ith international pace boler,
3ennis Lillee as its 3irector. )ot lon* thereafter, pace bolers 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 aarded the isvesvaraya
#ard for the 4est 4usiness :ouse in 'outh (ndia and the
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'eries %ricket !ourna"ent for the @aaharlal )ehru !rophy sposered by the
co"pany. !he %hief. Minister of !a"il )adu, 3r. M. Harunanidhi, aarded
MRF the 'pecial
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on the Ford "a*aine 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. oer #sia acific study alon* ith
4rid*estone for the custo"er satisfaction. Mrf Ltd. has infor"ed the
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reliability and durability O e"bodyin* the very ualities 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
ubilee year. :e started appearin* in full for", and ca"e to be knon
affectionately as the MRF !yre"an by "otorists across (ndia and 6?
countries orldide, ho have co"e to rely on hi" for a safe co"fortable
ride.
!hen a*ain in the year 00 MRF has crossed the ()R A0 billion "arkand fro" that onards it has on %usto"er 'atisfaction #ard continuosly
for five years in seven years of @.3. oer acific 'tudy.
Recently in 008 MRF Ltd. Launched a near ran*e of to heeler
tyres called =+apper>.
HISTORY BEHIND THE TRADEMARK
19
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!he 4irth of !he M&'%L
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COMPANYCOMPANY
PROFILEPROFILE
1
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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 00;, the
co"pany5s turnover crossed ()R A0 billion "ark. !he co"pany as *iven
the title of "ost ethical co"pany by G 4usiness orld5 "a*aine after a
survey conducted in 1999.
Founder H.M.Mannen Mappillai
%ountry (ndia
ear of
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Li*ht co""ercial,@eep and &tlity ehicle tyres
assen*er %ars !yres
Bff the road tyres
!o/heelers !yres
Far" 'ervice !yres
MRF I"#e&"$#()"$* )++(,e'
4an*ladesh
69Dk.$reen Road
anthaath
3haka
10?
4an*ladesh
MobileC Q 880-/1EA000810
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OB-ECTI.ES OFOB-ECTI.ES OF
THE STUDYTHE STUDY
;
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1. !o study attitude and satisfaction a"on* the consu"er for "rf
tyres
. 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*hhich product reaches the end user.
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PRODUCTIONPRODUCTION
DEPARTMENTDEPARTMENT
6
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P&)%/,#()" M$"$e!e"#is concerned ith the acuisition 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
"ana*e"ent of inventories , uality, the "aintenance K replace"ent
of faTilities K schedulin* of activities as ell as responsibility for
location, layout, capacity K "ana*in* of a syste". Mana*ers orkin*
in this function 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 .
E
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PRODUCTION INFORMATION
RA MATERIAL
#part fro" bein* capital intensive, the tyre industry is also ra
"aterials accountin* for about E0 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 "aor Ra "aterials used are natural rubber, nylon tyre cord,
carbon black, synthetic rubber Ra "aterial costs for the last threeyears have been risin* constantly, especially those of rubber and crude
oil/linked ra "aterials. !he steep rise in ra "aterial prices has
i"pacted profit "ar*ins of all players. %onsistent rise in "aor ra
"aterials costs ith li"ited pricin* fle2ibility, has resulted in pressure
on "ar*ins of tyre co"panies, despite a *ood topline *roth.
%onseuently, hile the revenues shoed a healthy *roth,
profitability re"ained depressed. (n fact, so"e of the "aor tyre
co"panies are operatin* at break/even situations. !he folloin* is the
brief description of the "aor ra "aterialsP
9
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RUBBER PRICES
(n 00E/08 production and consu"ption of rubber *re by ?.? and
6., respectively, hile e2ports increased by ?1. 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 0.A,
hile the international prices soared by A1.? in the sa"e period. (n
#pril/@une 006, 3o"estic/Rubber prices increased ?9 y/o/y, hile
the international prices increased E6.6.
)atural/Rubber prices have been continuously on the rise in the
international "arkets, ith eather conditions playin* a "aor role in
disruptin* supplies. 3urin* F06, %hina lost rubber plantations in the
:ainan province due to a typhoon in 'epte"ber 00E, folloed 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. ith
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 *roth in
e2ports is drivin*/up avera*e do"estic prices of rubber. ith 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.
A0
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N*)" T&e C)&% NTC F$&(,
)ylon tyre cord accounts for around of the total ra
"aterial costs. 3urin* 00E/08, the production of )!% fabric declined
by 1., hile its consu"ption *re by 9. !his i"balance in the
production/consu"ption pattern has led to a E.? increase in do"estic
)!% prices in 00?/06. !he international prices are "uch hi*her than
do"estic rates and have shon a 1?. increase in 00E/08 the price
of caprolacta", the "ain feedstock for )!% fabric, increased by 6.
in the sa"e period. :oever, the avera*e international anddo"estic
prices durin* #pril/@une 006 ere loer, by and 18,
respectively, due to carpolactarn prices, hich declined by 10.8 .
A1
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OTHER RA MATERIALS
!he prices of other ra "aterials like carbon black, styrene
butadiene rubber '4R- and poly butadiene rubber 4R- are closely
linked to *lobal crude oil prices.
!he avera*e do"estic price of carbon black increased by E.E
in008/09 and the avera*e international prices of both '4R
and 4R increased by 16.9 and 1A.;, respectively, durin* 008/
09. 3urin* #pril/@uneB6, the avera*e do"estic price of carbon black
increased by E. and this "o"entu" is e2pected to continue. !he
avera*e international prices of both '4R and 4R fell by 10 and
1.;, 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
prices. !he consistently risin* natural/rubber and crude oil prices.andthe 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 0, across cate*ories.
:oever, 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 don fro" their peaks of Rs.1 1?, to Rs.8 currently, the trend
is very volatile. !yre co"panies ould definitely sho i"prove"ent
in the "ar*ins, seuentially, and if prices re"ain at these levels,
profitability ould i"prove. 4ut then, it is hi*hly dependent on the
prices of "aor ra "aterials like Rubber, %arbon 4lack, )!% Fabric,
A
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'4R and 4R, hich are hi*hly volatile. :oever, ith sur*in*
auto"obile sales, if de"and for tyres increases ithout the supply
catchin* up ith it, then, prices of tyres are likely to increase. !his
"ay provide so"e benefit to the tyre co"panies.
AA
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FINANCE
DEPARTMENT
A;
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INTRODUCTION TO FINANCE
FINANCIAL MANAEMENT 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*aniation.
#ccordin* to :unt illia"s K 3onald 'onsP
=Finance function is defined as a task of providin* funds reuired
by an enterprise on the ter"s "ost favourable to it in the li*ht of
the obectives of the business>.
A?
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#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 specialied function of *eneral
"ana*e"ent hich is related to the procure"ent of finance K it5s effective
utiliation for the achieve"ent of the co""on *oals of the oranisation.
A6
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RESOURCES OF FINANCE
!he Mi*ration research Foundation focuces on receivin* proect
specific fundin*, and efforts are "ade to secure financial support in there*ions here they conducted. For proects of particular si*nificance to
conservation i.e., %ritically endan*ered species and habits- , MRF seeks
international support hen local fundin* is insufficient. !ele"etry units and
data retrieval are very costly, and it is critical to secure the support of all
interested parties.
!he foundation ill ensure that its proects are "ana*ed efficiently
and that its operatin* costs are "aintained at a level no hi*her than 0 of
the total operatin* bud*et. MRF is co""itted to focusin* the vast "aority
of its financial and hu"an resources toards the develop"ent,
i"ple"entation and co"pletion of scientific research proects. #ll profits
derived fro" trackin* contracts for third party or*aniations ill be directed
toards the foundation5s operatin* costs. !he (R' reco*nies MRF as
&nited 'tates ?01U A- re*istered charity and as a %anadian re*istered
charity ith the %anadian %usto"s Revenue #*ency.
AE
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SOURCES OF FUNDIN
1 ):e&"!e"#
$overn"ents are faced ith needin* to publicity involvin* a third party,
they sho they are handlin* the situation in obective and non/political
"anner. $overn"ent realies that properly done research is e2pensive and
desi*nate funds each year for such ork. MRF ill take advanta*e of this
public need to obtain lon*/ter" fundin* and e2pand the foundation5s
reputation for hi*h uality scientific ork.
2 C)&)&$#()"'
%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 hich they operate. !he *eneral public is
increasin*ly focused on this corporate co""unity responsibility.
%orporations can feel secure that funds donated to MRF ill be used forsound scientific research ithout e"otional or political bias.
3 P/*(, $"% P&(:$#e F)/"%$#()"
!here nu"erous foundations that sponsor conservation research via funds
dedicated to individual proects. 'uch or*aniations are i"portant for the
support of specific research proposals developed by MRF. For proectsconducted in partnership ith other or*aniations, MRF ill arran*e for
oint fundraisin* ca"pai*ns, as proects ith to lead partners have *reater
potential for securin* the necessary financial support.
A8
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4 C&e$#(:e F/"%(" C$!$("'
!he directors ill develop creative fundraisin* ca"pai*ns to establish
ne partners and pro"ote continued support fro" current sponsors. #ne2a"ple of such a ca"pai*n is enterin* into a partnership ith re*ional
ineries to obtain royalties off the sale of specially labeled ine, if you have
ideas that pertain to this type of oint venture.
5 I"%(:(%/$* D)")&'
!he private sector is an i"portant source of fundin* for MRF. (f you
ould like to contribute, please visit our.
:B B& %#) :
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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, ith a ; share in ter"s of revenues.
(ts leadership position, coupled ith its stron* brand recall and hi*h uality,
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
toV three/heeler se*"ent includin*
"otorcycles- and tractor front tyres, and holds second place
in the passen*er cars and tractor / rear tyres. MRF has
e"er*ed as the sole supplier of truck tyres to olvo. (t is the lar*est supplier
of radial car tyres ;0 share- to !elco5s (ndica, ith a "onthly supply of
10,000 tyres. !he %o"pany has a distribution netork of ,?00 outlets
ithin (ndia and e2ports to over 6? countries orldide.
(ndia s $lobal !he *lobal tyre "arket currently is esti"ated at &'3
E0 billion hile the (ndian "arket is around Rs. 100 "illion. !he *lobal
"arket is do"inated by $oodyear/'u"ito"o ith a share of . Bn the
other hand, the do"estic industry is do"inated by MRF Ltd. 'everal
"er*ers and acuisitions have characteried the *lobal "arket, in the recent
past. %urrent 'cenario ricin* .
;0
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'cenarioricin* 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 /A "onths the lyre co"panies are offerin*
discounts beteen 0 to ;0 percent to car "anufacturers, but the car
co"panies are tryin* to sueee "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
industry. (ndia5s si*nin* of the 4an*kok a*ree"ent ith #'
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H(;e (" T&e P&(,e'
!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. :oever, after the constant rise in
ra "aterial costs, al"ost every player has, in different branches, stepped up
their product prices. (n 006/0E, the avera*e tyre prices have been hiked
thrice and the cu"ulative increase in truck K bus tyres is ;.6, in car nylon
is 1. and in car radial tyres is ?.1 , over the sa"e period last year. !he
price hikes in 00E/08 have resulted in a cu"ulative price hike of 0
across all cate*ories, by al"ost all players, ith MRF an e2ception, hich
did not increased prices in @uly B6. %o"bined ith the price hikes, if the
current price/levels of ra "aterials persist, it ould result in better
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 don. :oever, 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 inter alia, has declared A0 second
interi" dividend on the paid/up capital of the %o"pany.
;
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MRF Ltd. has infor"ed re*ardin* the
standalone Results for the uarter ended on AB/@&)/008 Ws
follosC )et 'ales of Rs.1 1A A;AD/ for uarter endin* on A0/
@&)/009 a*ainst Rs.99;EED/ for the uarter endin* on A0/ @&)/00E )et
rofit D Loss- of Rs.;?0 lacs for the uarter endin* on A0/@&)/009
a*ainst Rs.81E lacs for the uarter endin* on A0/@&)/008.
;A
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TECHNOLOY
!he tyre industry has evolved fro" the "ore basic cross ply to
the "ore sophisticated radial tyres. )ylon cords that i"part loei*ht and additional stren*th to the tyres have also replaced %otton
piy. )ylon tyre cord accounts for around of the total ra "aterial
costs. 3urin* the production of )!% fabric declined by 1., hile
its consu"ption *re by 9. !his i"balance in the production/
consu"ption pattern has led to a E.? increase in do"estic )!%
prices in 00?/06. !he international prices are "uch hi*her than
do"estic rates and have shon a 1?. increase in 00?/06P the price
of caprolacta", the "ain feedstock for )!% fabric, increased by 6.
in the sa"e period. :oever, the avera*e international and do"estic
prices durin* #pril/ @une 006 ere loer by and 18,
respectively, due to carpolacta" prices, hich declined by 10.8
.!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 to have an i"pact on the transport sector.
(n ter"s of technolo*y, radial tyre usa*e has been catchin* up at
a uick 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
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4
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'o"e "o"entu"P levels of radialisation in M:% is predicted
to be 10 in five years ti"e, hile in L%, around 0.
!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 netork. # better distribution
ill also ensure easy availability. !he introduction of neer auto
"odels ill si*nificantly have a bearin* on the tyres de"and. !he tyre
co"panies ill also be lookin* for tie/ups ith the ) B
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'everal "er*ers and acuisitions have characteried the *lobal
"arket, in the recent past. !his is essentially to acuire 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
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HUMANHUMAN
RESOURCERESOURCE
DEPARTMENTDEPARTMENT
;8
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:u"an Resource Mana*e"ent :RM- is the function ithin an or*aniation
that focuses on recruit"ent of, "ana*e"ent of, and providin* direction for
the people ho ork in the or*aniation.
Flippo5s definitionC =(t (s a process of searchin* for prospective e"ployees
and sti"ulatin* and encoura*in* the" to apply for obs in an or*aniation.>
!hus the purpose of recruit"ent is to locate sources of "anpoer to "eet ob
reuire"ents and ob specifications.
F$,#)&' $++e,#(" Re,&/(#!e"#
1. !he sie of the or*aniation.
. !he e"ploy"ent conditions in the co""unity here the or*aniation
is located.
A. !he effects of past recruitin* efforts hich sho the or*aniation5s
ability to locate and retain the *ood perfor"in* people.
;. orkin* conditions, salary and benefit packa*es offered by the
or*aniation.
?. Rate of *roth of the or*aniation.
6. !he future e2pansion and production pro*ra"s.
E. %ultural, econo"ic and le*al factors.
:oever these factors "ay be divided specifically as (nternal and
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I"#e&"$* F$,#)&'
1. Recruit"ent policy of the or*aniation
. :u"an resource plannin* strate*y of the co"pany
A. 'ie of the or*aniation and nu"ber of people e"ployed
;. %ost involved in recruitin* e"ployees
?. $roth and e2pansion plans of the or*aniation
E
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!he criteria for selection and preferences should include "erit and
suitability.
. Recruit"ent or*aniationC (t is necessary to centralie the recruit"ent
and selection function in a sin*le office. !his ill brin* about
"a2i"u" efficiency and success in hirin*. !his centralied office is
knon as the
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b. (ndirect O !his involves advertisin* in nespaper, radio,
!., ournals etc. #dvertisin* can be very effective if its
"edia is properly chosen.
c. !hird arty "ethods O !his include use of co""ercial
or private p7y"er aieoXes, place"ent officials of
schools, recruit"ent fir"s etc. Friends and relatives of
present e"ployees are also a *ood source fro" hich
e"ployees "ay be dran as part of the =4uddy Referral>
pro*ra"s.
?
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MARKETINMARKETIN
DEPARTMENTDEPARTMENT
?A
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MARKET INFORMATION
#lthou*h the tyre industry faces hu*e co"petition, price K cost
pressures and hi*h entry barriers, the chan*in* dyna"ics, ith the *roin*
econo"y and the escalatin* auto industry, provide a fillip to the industry.
!he oo"in* auto industry, ith sales *roin* at a %#$R of 1?.8 durin*
the 00/06 period, has driven the *roth in the tyre industry, keepin* both
the B
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Market share in the co""ercial vehicles lyre cate*ory and is around
0 in the to heeler lyre cate*ory.
!he (ndian lyre industry has itnessed a %#$R of E.E over the last
decade. !hou*h the replace"ent "arket has driven the industry *roth for a
lon* ti"e, the B
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DEMAND FOR TYRES
T=e De!$"% C,*e
ROIN ECONOMY
(ncrease in inco"e increase in de"and increase in
Level, hi*her dis/ of frei*ht "ove"ent ear K tear
osable inco"e of tyres
(ncrease in dern/ increase in corner/ creates repla
and for passen*er cial vehicles ce"ent
cars de"and de"and for
tyres
increase in de"/ increase in tyres
and for passen*er de"and fro"
car tyres B
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INCREASE IN TYRE SALES
E>PLAINATION
De!$"% for #&e' can be cate*orised under four se*"ents /
Replace"ent Market RM-, the Bri*inal
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!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
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distances, "ainly on inter/city and intra/state routes, re/treadin* is hi*h.
:oever, 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 breakdons costs
are i""ense. !he substantial *roth 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
the years to co"e. 'i"ilarly, the current *roth in the auto industry and
"ountin* B
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the leader in the toV three/heeler se*"ent includin* "otorcycles- and
tractor front tyres, and holds second place in the passen*er cars and tractor /
rear tyres.
A)**) T&e'AIL
MRF T&e' is the second lar*est player in the (ndian tyre industry,
ith $ "arket share of , in ter"s of revenues, and the lar*est player in
the !K4 se*"ent, ith around "arket share and 8 of its product
"i2 co"in* fro" this se*"ent. (t also enoys a stron* brand recall. #!L
derives 80 of its revenues fro" the replace"ent "arket, here the
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(n ter"s of profitability, %
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!he industry is definitely set to *ro, but the hu*e co"petition, hu*e
buyer poer, 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 *roth of 1/1; in 009/10. !he perfor"ance of the tyre.
6A
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industry is linked to the auto"obile and infrastructure sectors, the *roth of
hich is dependent on the erfor"ance of the econo"y. !he current
esti"ated econo"ic *roth is over 8. !he continuous thrust bein* placed
by the $overn"ent on the develop"ent of infra/structure, particularly roads,
a*riculture and "anufacturin* sectors, ould lead to an i"pressive
acceleration in the auto"obileV tyre sector, *eneratin* "ore de"and for
tyres.
%o"panies keep on developin* different sies and desi*ns to "atch
the co"petitor5s products. :oever, the future is likely to be different sinceco"panies are investin* in technolo*y. Marketin* too is *oin* to beco"e
technolo*y/driven.
6;
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E>PORTS
(n 196E, MRF be*an to e2port tyres to &'# / the birthplace of
tyre technolo*y. %urrently, MRF !yres are e2ported to 6? countries,
includin* &nited 'tates, 'outh #"erica, #frica, Middle the MRF %M3 said, pointin* out that
international tyre prices reflected the hi*h input costs.MRF has been
able to achieve this throu*h its co""it"ent and confor"ity to a level
of uality that has been accepted not only in (ndia but in E? countries
around the orld. 3M% is the sole a*ent for MRF "otorcycle and
three/heeler tyres in 'ri Lakethe %o"pany has set up shop in 3ubai
to tar*et "arkets in the < as part of its e2port thrust. Bn the other
hand, in tonna*e ter"s MRF has not *ron "uch due to the
slodon in M:% tyre and have recorded a 0.A *roth, in the
de"and for tyres.
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$lobal "arket, in the recent past. !his is essentially to acuire
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 A0 of e2ports fro" the country. !hese are
"ostly of the cross ply variety. :oever, of late (ndia5s share in the
&' "arket is bein* threatened by %hina and @apan. !hese to
countries are able to offer prices that are loer than that offered by
(ndian "anufacturers. (n addition, these to 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 loer
than the (ndian price by A0. (n addition, tyres fro" 'outh Horea are
i"ported at A0 custo"s duty hile fro" other countries the duty
levied is A?. !hus in both cases the do"estic tyre "anufacturers are
feelin* the heat.
66
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INTRODUCTION TO PROMOTIONAL ACTI.ITIES
ro"otion consists of those activities hich are desi*ned particularly
to help easy sale of *oods or services to the favourable attention ofconsu"ers. 'ales pro"otion is one of the part of pro"otional "i2 hich
sti"ulates custo"ers K dealers for the purpose of increase in sales.
(t can be defined asP
1. =#n e2ercised infor"ation, persuation K influence>.
. ='ales ro"otion includes all the activities K tools of "arketin*
"ana*e"ent hich sti"ulates the tar*et custo"ers for the purpose of
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,
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PROMOTIONAL ACTI.ITIES
ro"otion consists of those activities hich are desi*ned
particularly to help the easy sale of *oods .'ales pro"otion is one ofthe part of pro"otional "i2 hich sti"ulates custo"ersK dealers for
the purposes of increases in sales. !here are "any pro"otional
activities undertaken by GMRF !R
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ACHI.IEMENTS OF MRF
achieve"ents YEAR
'pecial
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%usto"er 'atisfaction #ard 008/009
CONCLUSIONCONCLUSION
E0
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MRF !R
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SUESTIONSUESTION
E
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STREANTH
1.
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OPPORTUNITIES
$roin*
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BIBLIORAPHYBIBLIORAPHY
E?
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MARKETIN MANAEMENT
By Philip Kotler
EBSITES
???!&+#&e',)!
???))*e,)!
????ee;e%($,)!
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