Case Study #1: Michelin in the Land of Maharajahs
Question 1: Segment the Indian Tyre Industry / Market
Do we need to cut the industry into segment? For that we have to determine if the industry is Homogeneous or Heterogeneous?
1. Products/Services: In the Indian tyre market different product exist,
* Commercial Vehicle (19% of sales Volume & 60% of sales value in India)
* Cars (17% of sells Volume & 24% of sales value in India)
* Two-Wheeler (29% of sales Volume) and Three Wheeler (19% of sales Volume)
* We don’t take these 2 products into account (represent just a few part of the sales volume)
We don’t take these 2 products into account (represent just a few part of the sales volume)
LCVs (6% of sales Volume)
* Agricultural vehicle (10% of sales Volume)
We decide to consider only the commercial vehicle, the cars and the Two-Wheeler for our segmentation study.
2. Client’s needs/ Market
* The OEM (Original Equipment Manufacturers) Market : direct purchase of tyres by carmakers.
* The Replacement Market : distributors either exclusive or multi-brand
* The Export Market (to other emergent countries)
* Radial tyres (including tubeless tyres): good resistance, good road-holding at high speed and increase the car performance.
* Cross-tyres : long life-time (double) and adapted to variable quality of road, to overload vehicles and re-treadable
If we keep this three selections criteria we obtain: 3 x 2 x 2 = 12 segments.
So we decided to narrow the number of criteria, keeping those which are very specific to the Indian market: the range of Products and the technologies (India is one of the only country where we can still sell cross-tyres today).
Conclusion: we have 3 X 2 = 6 Segments which are:
1. Car with cross-tyres
2. Commercial Vehicle with cross-tyres
3. Two/Three-Wheeler with radial cross-tyres
4. Car with radial tyres
5. Commercial Vehicle with...