10 mistakes which international tyre brands commit while entering Indian market
Indian market is not easy to crack with its own peculiarity like mandatory BIS certification, absence of nationwide distributors, absence of single country wide trade tax etc. . . . This has meant that brands like Hankook, Kumho, Pirelli, Maxxis, cooper, Nexen etc. have struggled to find a foothold in the market . None of these brands have been able to breach sales of 10,000 tyres per month. Question arises, is it only the market which is at fault or is it too with these brands inability able to lay down and execute an effective market entry strategy. After careful study of operations of some of these international brands we have identified 10 striking mistakes which International tyre brands tend to commit while entering into the Indian market.
Following the same distribution model: Tyre brands have tried entering the Indian market by appointing couple of distributors in India expecting them to churn out numbers for them. It may look good on an excel sheet but it has never worked in the past and there is no reason why it will work in future. However brand after brand entering into India tend to follow the same model.
Appointing retailers as distributors: we agree that it is not easy to find distributors for a new tyre brand in India. However that does not explain why brands end up appointing retailers as distributors. Distribution is simply not in their DNA. Retailers may be excellent sales guys but they do not want to leave their store’s sales counter. They have never travelled seeking retail partnerships, talking about and building the brand. They can at the best be “order fulfillers”.
Leaving brand promotion to the distributors: The classic way international brands handle advertising and promotion for their brands in India is by giving 2-3% extra towards promotional expenses. That never gets spent. As the result the brand building never gets started and no consumer connect is built.
Hiring people from the other brands: international brands have limited openings for their Indian operations. That is understandable. However as soon as a brand lands in India they look at people working for other brands to fill the vacancy. These people migrate with the same thinking, same dealer set up, similar biases, similar work style and unfortunately similar sales potential. It’s is pitiful to think that a person who could not generate sales for a much larger brand in India will be able to do it for them in the Indian market.
Not going online : With limited tyre dealer pool stock having a good financial capability, brands tend to go to same set of retailers and try to appoint them as their dealer. This makes it impossible for tyre brands to build an effective dealer network. People in tyre industry have still not woken up to the potential of online business. However for newbie tyre brands it is all the more important to be online. That is the best and the cheapest way to be seen by the customers and getting the sales kick started.
One dealer – One city: in a bid to rope in a dealer to sell their brand, brands give exclusivity to one dealer in one city. This goes against the very grain of marketing principals. Just imagine squeezing your brand viability at a time when it needs the most. This sets a brand on a path of limited scalability. No brand in India following this model has been able to cross sales of 10000 tyres per month in India. However brand after brand tend to follow the similar model to rope in dealers into their network.
Not having effective complaint re-address system: Brands tend to leave it to their distributors to take care of the complaints. The warranty cards get printed but no system is set up to effectively capture these complaints and address them. I met a country manager of a one of the international tyre brand who took pride in the fact that he is stingy with tyre claims and in a year he had passed only one claim. Such news gets carried fast in the trade and tyre dealers start avoiding the brand which they are not very confident of, when it comes to approving claims.
Not building their Indian web site: Not one international tyre brand which operates in India through a distributor have a local site for India. Come on!! Do they really think that consumer will buy a brand if he is unable to locate a local website for the brand? Not having a local website gives a clear message that the company does not have a local presence. These days when people are taking decision after researching online it is a sure way to commit Harakiri in India.
Inaccessibility: Expat managers who are responsible for marketing tyre brands in India – Whether stationed here or overseas are simply inaccessible. We wanted to get in touch with one of the expat country managers stationed in India and asked for his email from his Indian colleague and pat came the answer you write to me and I will pass it on to him. Building such walls effectively shuts off any meaningful idea coming their way.
Not participating in tyre expos: That may sound strange to people who are not in tyre trade. You want to enter into Indian market and expos provide best platform to meet up with business prospects but walk into any tyre show in India you will only find Indian or Chinese brands. Foreign brands for some explicable reason are not there. Missing expos translates to missed contacts, ideas and opportunities.
Cracking open the Indian market is not as difficult as most of these tyre brands have made it to be. ChangeMyTyre is in process of launching an integrated platform which will help international tyre brands have an effective access to an Indian tyre dealer network, competitively priced promotional solutions, effective connect and communication with the consumer and an easy complaint management system. They have leveraged mobile technology to do this. How does the platform look like? Watch this space.