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Michelin in India Case Study Solution

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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)

  3. Technologies
  * 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...

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