MIT SCHOOL OF BUSINESS

Case Study
Alpha Tyre Company
Alpha Tyre Company (ALPHA) is engaged in the manufacture and sale of car tyres. Most of
ALPHAs business is conducted primarily through the OE (Original Equipment) route,
selling to automobile manufacturers such as Maruti, Hyundai, Tata, Honda, Toyota and
Hindustan Motors. The company has a strong presence in the OE market and it wants to
protect its dominance in this space. However, APLPHA is lagging behind in the replacement
market with minimal brand recall in the market place.
In the overall tyre market, ALPHA has a small share since it specializes in car tyres only.
The big India players in the market like MRF, CEAT and JK wield a wide range of tyres for
two-wheelers, three-wheelers, cars, utility vehicles, and commercial vehicles i.e. trucks and
buses.
The companys new CEO, who has recently been brought in from a Consumer Durables
company, fears that a low brand recall in the replacement market would adversely affect
their OE market share and therefore wants to develop a growth strategy to expand the
companys replacement market share.
The marketing department at ALPHA did not have a consistent and researched
understanding of what drove tyre sales and how customers preference have been sketchy
and market information has been collected on ad-hoc basis. There is no evidence of any
extensive study conducted on consumers and most of the theories going around in the
company are based on hunches and gut-feel. Various strategies were used in the past to
reach the customer target groups. The tyre-dealers were targeted through a rigorous sales
process along with target-based schemes. Mechanics and Car Service Stations were reached
through direct schemes. Mass Media and PR were used to communicate with end users.
The Sales department has a different approach on what needs to be done in the
replacement market they believe that pushing the product with better dealer margins is
the way to go and that the Marketing department is wasting time with Positioning and
Brand Building.
The quality of tyres is judged, among other factors, on the wear rate of tyre, which was
measured with a calibration device after certain specified usage intervals. ALPHA has a
modern tyre testing lab and most of their tyres compare well vis--vis their competition in
lab tests and road tests conducted by the company.

The meeting of the core committee convened by the CEO was coming to an end, in his
concluding remarks the CEO said Many aspects have emerged out of this session, we must
pay attention facets such as relevance of brand and brand recall in this product range,
whether brand awareness plays a part in sale of tyres especially in the replacement
segment,, what factors actually influence buyers preference and choice? Is a purchase a
choice based one or convenience based one? How to evolve a marketing plan which can be
effective in improving sales are points I wish to be addressed. I would also expect an
objective analysis of competition and effect of differentiation.
As VP Marketing & Sales, you have the responsibility to chart out and recommend an
alternate strategy to improve the standing of Alpha Tyre Company to the CEO.