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Chapter-1 Introduction Introduction to study Objectives of the study Scope of the study Methodology Limitations

Introduction Introduction to project report Today, marketing is not considered as a mere physical process or set of activities connected with the exchange of goods. It considered as a philosophy of business. It is concerned with creation of customers i.e. identifying the needs of the customer. The concept of marketing is changed considerably in recent years. The change in the concept of marketing is mainly due to these reasons;

2 First, there is a element of innovation involved in modern business. Secondly, there has been change in the objective purpose of business in recent years. The change in the purpose of business is continued to change in the purpose of objective of marketing. Thirdly, there has been change in the attitude of consumer in the recent years. Today consumers are not prepared to buy any thing & everything thrust on them by the sellers. They are willing to buy only those things, which satisfy their wants. The entire marketing mix will be formulated on the basis of marketing information and research. This project is also concerned with such marketing fresh research and it deals with marketing of J.K tyres with special reference to MRT tyres agency. Attempts have been made to analyse marketing situation and marketing problems confronted and also consumer survey has been undertaken for analyzing the effect of marketing mix of MRT tyre agency. Suggestions have been given for adopting suitable marketing arrangements. Ensuring fair return on the capital invested on one hand and customer satisfaction on the other. This report is submitted by a student of final year B.B.M for the partial fulfillment of obtaining the B.B.M degree.

Objectives of the study: Following are the important objectives that we contemplate in this study

3 1. To know the consumer perception and preference of his brand of tyres. 2. To know what market says about competitive brand 3. To examine performance of j.k.tyres with the competition. 4. To analyse the customers basic needs while purchasing tyres. 5. To analayse performance, services and customer oriented action, and marketing activities of MRT agencies Shimoga. Methodology: Personal interview with dealer and users of tyre has been used as survey technique for collecting data. Using primary and secondary data has made the survey. The primary source consists of data collected from dealer and tyre owners. The secondary data has been collected from encyclopedia, annual report of the company, technical and commercial journals and newspapers. SCOPE OF THE STUDY The study of this report is confined to Shimoga city only. The study was conducted to know the competitive environment while marketing the products. The study was also intended to know the buyers attitude towards J.K tyre products, this frequency of purchasing various other brands of products, their opinion regarding the quality, durability and price etc., Limitations of the study 1.One of the main limitations was the time factor. The available time is utilized to the maximum extent to bring quality and accuracy in this report. . 2.The study is restricted to the information supplied by sample respondents and officials of the firm. The chance of human prejudices and bias may be there in the information-supplied by the respondents.

4 3.much time was lost in explaining to the respondents about real purpose of the survey. Many consumers are hesitant to give the needed information. Some respondents were quite casual in their answering, they answered without any seriousness, however, I feel that my conclusions are practical and realistic. 4.The sample drawn from the survey does not cover the entire Shimoga district. The sample size had to be restricted due to lack of time and other resources constraints.

Chapter -2 Product profile Background history of rubber Manufacturing process

5 J.k steel radials Manufacturing of buty1 tubes (Tubes manufacturing)

Background history Rubber basically is milk like fluid obtained from certain tropical shrubs, which is then subjected to various process of manufacturing. Chemically. India, kerala, accounts for major chunk in production of rubber. Rubber is the life of nation. Because, of its various uses, especially in times of war and peace. In 19 t h century from various experiments of a Scottish chemist Charles Macintosh and English counterpart Thomas Hancock first attempted to dissolve rubber with turpentine that then turned into production of elastic thread, but the method of binding rubber was still a dream than. With the advent of a discovery by scientist Charles Goodyear, the process called vulcanization came into being. Goodyear tried many ways with mixture of heat crude rubber and sculpture which was called by him vulcanization. After vulcanization god of heat by his

6 mixture he discovered to make rubber that could be hard, strong, elastic. This process was patented in 1844 till date is being used to make rubber. Invention of wheel: Wheel was first invented in Mesopotamia. Transportation being important in any country, the need to develop faster movement of goods necessitated the invention of wheel. Man used to move heavy loads using cylindrical logs. This helped to evolve the wheel on course of time. Wheels made out of wood were found to be too heavy for transporting hence holes were cut into them to make it light. advantageous instead of Later wheel with spokes came, which was spokes and rim they were durable and

economical, with this the introduction of pneumatic tyre took place. Robert. W Thomson an engineer from Scotland invented pneumatic tyres. Prior to that wooden wheel with steel belts and later on solid rubber tyre were used. But these methods was not economic and hence gave birth to pneumatic tyres later on John B Dunlop a Scottish man improved further and filled air in rubber tubes for his sons tricycles this air filled tubes in the tyres gave a smoother and comfortable ride. Pneumatic tyre was first fitted on automobiles by the French rubber company called Michelin in America first tyre was used on commercial vehicles wheel that was made by good rich company was back in 1886. With the transport industry growing in large scale and bounds the demand of tyre. And it has gone up considerably with the Indian economy. Opening up of new technology has to be adopted in order to be in the main stream of global competition. Indian rubber manufacturing: Radicalization of tyres is the only development to be in match with the growing industry.

7 Indian rubber industry came into existence in 1920, which was opened in west Bengal for manufacture of model rubber goods. Two large tyre factories were established in India Dunlop established in 1939 present there are 11 companies with Dunlop tyres of the kilogram group being the latest entrant. Tyre manufacturing process: Chemically a tyre consists of log chain macromolecules structurally a tyre high performance composite. Mechanically a tyre is a flexible membrane pressure container. And it is a complex product and required to deliver very high standard of performance and perfection, which can be attained through good design, carefully controlled materials and responsible manufacturing process. The three more basic requirements of tyre is 1. Load carrying capacity. 2. Must be able to transmit driving torque. 3. Must provide flotation on the surface encountered during the period in addition to meeting the above three requirements tyres must possess high standard of durability, strength, and good appearance. power loss. Manufacturing process in general Raw rubber either in natural or synthetic form is mixed certain black material, the process take place in large machinery called banbury in addition to mixing mastication, the banbury warms the rubber to make it pliable and preparation for further operation. The raw product emerges in the form of long flat bands of rubber, which are then worked in rolling mills. The compound is then fed on to various machines to form four major components of tyres i.e. thread plies, belt and beads. Traction, ability, fatigue, resistance, comfortable ride, low noise level, heat resistance and low

8 Thread rubber is processed in a tuber, then measured culled and cut into precise lengths this portion of the tyre is now compound for wear abrasion resistance and tractions it and contact with the road surface price are produced in calendar mills which combine rubber compound and fabrics such as nylon of polyester of rayon which has already been processed in the dip unit. Now this compound cooled fabric form the body of the tyre the tyre bead is the circular band that support the linear circumference of the tyre & seals it firmly to the rim of the wheel the beeds formed into hoops providing rigidity & strength where the tyre contact the rim. The tyre components are now brought at the turret of the tyre-building machine. The focal point of this machine is the cylindrical building drum. The process begins with the application of thin layer of special rubber compound to the drum called inner lines. Next the piles are placed on the drum one at the time; the piles are turned up around the beads Betts. If they are one placed, at finally the thread and sidewalls are added to complete the tyre. The operator makes the drum collapse and the green tyre that resembles a barrel with both ends open is taken out in radial tyres before the belts are applied. The green tyre is generally is expanded form a cylindrical to a tutorial shape then the belts and threads are added green tyre. So, formed are now loaded into an automatic press after minimum 8 hours engaging and cured at a high temperature and pressure. In the curing process the rubber is cross limited in a series of chemical and tyre dimension after curing the tyre with nylon fabric is mounted on a rim and permitted to cool while inflated to avoid shrinking. This step is called post-curing inflation. The cured tyre is then given finishing which involved trimming of small bits of excess rubber, buffing and balancing and later visual inspection. New quality control dimension have been added in recent past by processing the tyre at the final stage through the uniformity, collection machine and x-ray machine. These are automated non-destructive testing to check and assure a smooth and prolonged ride.

9 Construction of a tyre: Todays construction ranges from bias and belted stroke bias to radial and cord materials include polyester, fiber, glass, steel, rayon and nylon three basic types of construction are: 1. Bias: - in bias (diagonal) ply tyres the codes run at an angle of approximately 35 degree to the central line of the thread alternate ply extend in opposite direction. In bias ply the cords run from bead to bead. 2. Radial: - in a radial tyre the cords run perpendicularly across the tyre from bead to bead-radial tyre have belted tyre plies, which run circumferentially around the tyre, under the thread this construction gives breaks strength and rigidity to the thread.

3. Belted

bits: - In a belted bias the body remains similar to that of

bias tyre while two or more belts are provided under the thread this construction give strength to the sidewall and greater stability to the thread. J.k steel radial The company pioneered the production of steel passengers radial tyre for the first time in India in the year 1978 the concept of radialisation was totally new to Indian roads and competition then phop phered the idea of radialisation then as things stands most of them have their radial plants and are even speaking of joint ventures in view of globalization 97% of the world ride on steel belted radials. Because it has power and safety breaking corning and driving even wet roads it eminences even the performance of the vehicle by way of increased the fuel efficiency, more mileage and better road grip. A modest 50% increase in initial tyres life as coppered to conventional bias ply tyre and a modest 75% saving on

10 fuel consumption and a modest saving of spring and other vehicle suspension parts and the other benefits given by a radial tyres.

What makes radial tyres different from other tyres? In bias ply tyre or cross ply tyre, fabric cords of the plies crissss cross each other diagonally at a bias angle from bead to bead at right angle at 90 1/3 angles. Since the cords do not cross each other. The sidewall of the radial tyre is greater flexibility and the sides tend to be rounder for the directionally stability. The following footprints are given below for more details; Radial tyres Cross ply tyre 1 cords in the plies run radially from Cords in the across plies diagonally bead to bead at a bias angle and are laid in a criss cross fashion layer upon 2. The radial oriented tyres cords add The diagonally laid cords tend to to high carcass strength with out move in opposite directions as the impairing tyre softness the steel belts tyre fleses in a scissors like fashion. act like a hoop restricting the carcass This causes internal stress resulting plies from extension in heat build up and rolling resistance

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3. The steel belts under the thread The scissors like movement of the stiffen the thread portion under the cords cause the thread to shuffle and eliminating the thread shuffle squirm resulting in faster wear elimination of thread distortion and increase thread life

4.the radially oriented cords in the While taking sharp corners the bias cross plies bend easily take in the ply tyre has a tendency to partially full cornering stress. The radial tyre left of the of the ground there buy maintains its superior road grip on reducing high speed the load contact area wet road even while cornering at loading to skidding at high speeds.

Advantages of radial tyres: Better fuel economy. Greater mileage (better thread life). Smoother ride (driving comfort). Batterer handling on sustained high speed driving.

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12 Improved high-speed performance. Saving in maintenances. Shock resistance. Conversion of petroleum based raw materials consumption (Reduces dependences on nylon cord)

1. The battery fuel economy is due to; Reduces rolling resistances of radial tyre and Reduced energy consumption while running For ex: - at 72 km per hour the rolling resistance of conventional tyre is 25 per ton while for all the steel radials it is only 19 lbs per ton, Tests credit radials with a 5%fuel saving 2. Radial tyre has strong steel belt under the thread and more flexible side wall, the thread the thread rod squarely and firmly on the road surface eliminating thread squirm which robs tyres of potential mileage it has been established that the thread life of all steel radial tyre is roughly one end and half of two times that of the conventional tyres tests have shown that steel radial truck/bus tyres have offered 60% better mileage that what obtained in bias ply tyre 3. The low equilibrium temperatures reached in radial tyres permit dedification. There is a very negligible rise as compound to cross ply tyres in the pressure of the steel radial tyres during running because they run cool. There is an improved overall road holding

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13 on rough broken surface pavement as tyre buy the load bounce or hop in short there is an improved road feel 4. . The increased stabilization of the crown of the radial tyres coupled with the improved thread wear resistances reduces casting distortions which eventually minimizes the deviations from the steered path caused by external lateral forces such as wind, concerning forces etc. The all steel radial tyres improved directional stability thus result in greater, during precession this means that the steering response in quicker and more accurate. 5. The radial construction with only one steel casing ply alloys the tyre to run cols with respect to the multiple plies which are there conventional tress this factor of the lesser temperature are relatively much higher than those in western countries. 6. It has been observed that over the same routes with radial tyres the replacement of complete load spring and the incidence of springs breakages have appreciably reduced for example and analyses carried out in France for 1.44 million kms of running replacement of complete load spring come down from 18 springs per lakh km. For radial tyres i.e. the consumption of load springs was 6 times less. 7.It is a well known fact that to with stand shock the object which experience the shock must either be hard yet elastic so as to repel all the energy of the shock or very yielding so as to absorb the shock. The cross ply tyre designers have restored the first choice i.e. to increase the number of plies and to thicken up the side wall rubber in order to increase the resistance and elasticity. However the second choice has been adopted in the radial tyres where the wells retract under shock, thus almost completely absorbing the energy of the shock, this option has proved its

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14 superiority over the first choice is indicated by radial tyres also when a radial tyre wall is damaged, the repairs is more easy than that of conventional tyres. 8. The production of radial tyres reduces the dependence on nylon cord, which is petroleum derivative. 9. Tests results show that radial can lower costs radial truck/bus tyres are but with steel belts under the thread combating thread and carcass damage. What makes a steel belted radial superior? In this type of tyre, we will find two layers of study rubber insulated steel between the cords and thread steel belts eliminate thread shuffle an distortion there by providing a much superior wet grip in addition these tyres are about a third wider than ordinary tyres. This features increase road grip steel further even on corner at high speeds the side wall bend easily so that the steel belted grip the road firmly. 7% fuel saving better fuel economy is due to reduced rolling restriction of radial tyres and reduced energy consumption while running test done at the government of India central and research institute show that J.K steel belted radials result in 7% fuel saving against nylon tyres. Are radial durable One of the factors that affect the life of the tyre is the size in the internal temperature, which has direct relation on seelcostiny ply alloys the tyre to run cool with respect to multiple plies, which are there in conventional tyre. Because the tyre defects more radial provide a better ride and this characteristics help to make the tyre puncture resistant and durable.

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Are Radials are the really better tyre: Customers are convinced. They are despite higher initial costs European fleets have been opting for radial tyre since they have been available in U.S.A the growth of radial since seventies is phenomenon now really one in every truck tyre is radial good with radials for out numbers the bad long distance and comfortably journey heavy payload and high speed hauling these are the bus and truck pictures today the outlook is more of the same with the emphasis on more progress in the passenger transport and trucking field has accrued through an interdependence of diverse technology which have brought about better buses and trucks better roads and link between them better tyre radial tyres. Are the radial suited to Indian conditions? It is well known fact that, in India, the transport operators have tendency to severally overload the vehicle where as the road conditions in most areas the far from satisfactory also during the man soon season there are several areas which get water logged and the movement of transport which on flooded and slushy loads is a common feature under such circumstances it is necessary that radial tyres would have to be tested on Indian roads over the last ten years tyre manufacture have been testing the radial tyre and have been evaluating the performance of these tyres under actual operating conditions prevailing in the country the initial test reveal that the thread life of the years was quite good but the problems was due to side wall and chafer and bead breakages. Also there were problems of the steel belt getting corroded under monsoon condition if cuts in the tyre were not quickly attended to but the subsequent tests.

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16 With improved version of radial tyres have shown that these problems can over come to a large extent however it may be pointed out that even when the cross ply tyres were initially introduced in the Indian market, there had to be several changes done in completing and design features in relating to the tyres employed on European and American roads hence any tyre manufacturing who would these tyres in the Indian market would naturally adopt the tyre design to suit the Indian conditions, by promoting R&D activities. Some of the test results of the radial tyres fitted on the vehicles of some state transport undertaking and other fleet owners have indicated the following. 1. The thread life of the radial tyres is more than that of conventional cross ply tyres by as much as 50% to 100%. 2. A positive trend in the lowering the diesel consumption per ton kilometer has been noticed and is found to vary from 5% to 10% depending upon the load and speed condition. 3. The tyres are more resistant to puncturing. 4. Spring failures are the minimum. Care and maintenance of radial tyres: 1. What proper alignment 2. Proper matching 3. A range inspection programmer: To ensure that each of the proceeding four points are properly observed for every tyre in the fleet. These are the basically the 5 essentials of a good tyre case programmer. Steps to correct mounting: - The 4 steps to correct mounting are: 1. Clean rim parts. 2. Lubricate beads /tube /flap.

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17 3. Double inflate. (i.e. inflate to operating pressure, completely deflate and then rein late) 4. Check seating. When mounting tyres here several checkpoints recondition the thread on every value both inside and outside to ensure proper seating of the value core and value cap. Use an approved tyre bead lubricant Before any inflation, check and confirm the correct inflation pressure for the size and price. The tyre should be gently inflated to not more than 15 psi and check made to ensure that the tyre is properly centered on the rim and the flangers and lock rings are correctly seated. Before the final inflation above 15 psi (1 bar) put tyre or wheel assembly into a safety cage. Double inflate: inflate to operating pressure completely deflate and check seating and then rein late. How important is tube condition: 1.Very important: Whenever a new tyre is mounted, a new tube should accompany it. Tubes normally stretch in services, so as used, larger tube in a new tyre may bucker again causing leaks and under inflation. Also, make sure that the new tubes are the right size. 2.Important is alignment: Tyres run in the direction they are pointed. If they are not parallel to each other and to he direction in which the vehicle is moving, tyre threads will wear unevenly or rapidly. Improper combs causes wear on the shoulder of the tyre likewise faulty wheel toe-in or toe-out causes swiffing or feathering of thread.

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18 Essential of a good tyre care programmer: order of their importance: Proper mounting. Proper inflation. In

A periodic total alignment check and efficient corrective programme can greatly reduce fleet repairs and replacement costs in addition to tyres. Such suspension parts as king pins, tie rod ends, spring shackle bushings, wheel bearing and shock absorbers and it will last longer by keeping the vehicle in proper alignments. Alignment maintenance is an important factor in keeping a fleet rolling at the lowest possible cost. Tubes manufacturing: Tube manufacturing and properties are very critical for tyre performance. Butty 1+epdm blend is superior to butyl for reduction in growth, weather, heat and arrack resistance. Tube manufacturing process: 1. Raw material butyl rubber, epdm rubber, gpf-hs black paraffinic oil, zinc oxide, stearic acid, sulphur and accelerator. 2. Mixing master compound mixing ban bury. 3. Staining straining of master compound to remove any type of foreign master 4. Extrusion: A). By adding sulphur and accelerators mother stock. B). By adding sleeved powder (during extrusion, guage, perimeter, linemark, stereo stamp, powder dusting parameter taken care) 5. Cutting of tubes to specified length. 6. Jamming of painted and dried values. 7. Splicing on most sophisticated machine midland for passengers and LT tubes, enjoy for truck, rear tractor tubes. 8. Chilling of splice area of tube for better consolidation

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19 9. Performing of tubes to attain proper shapes. 10. 11. 10.0.20 9.0.20 Curing of tubes with auto timer and temperature control. Inspection of tubes 100% visually and then Truck -------------50% inflated Truck --------------25% inflated Radial --------------100% inflated Pass 12. 13. 14. -------------- 50% inflated Value bending, cross fixing through standard torque machine. Vacuums and cap mixing. Ware housing and packaging.

Advantages of epdm blend in butyl tubes. 1. Helps in reducing growth of heat. 2. Enanhances weather resistance. 3. Ozone cracks resistance of fold area.

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Chapter- 3 J.K ltd company profile History of J.K tyre Industries Organisation Market share.

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Sales and other income [Rs in crores]

Graph Sales analysis Operation: Production at the company tyre plant Jay Kay gram

(Rajasthan) was maintained at high levels with all round improvement in productivity and efficiency. In the first full year of working at the companies new tyre plant at Ban more considerably higher capacity utilization was achieved. The addition of this plant was made the company the third largest produces of passenger car, L.C.V and jeep tyres n the country. The substantial drop in sales of vehicle in 1997 98 over 1998-99 is indicating of the recession, which offered the entire automotive sector. Before last year sluggish market conditions prevail throughout. Despite this the company increased production and sales and also its market share significantly. Increase in domestic sales of truck tyres was of the order of 21% over the previous year while the rest of the industry dropped by 4% in view of the aforesaid, the companies result can be considered commendable. Export remarkable growth The total exports of the company during the year 1997-98 were of the order f RS 94 crores accounting for the over 18% of the turn over. The

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22 company continues to be net foreign exchange earners. The company tyre report registered a remarkable growth from RS 37 crores in 1998-99 to RS 85 crores a 3.2 fold increases the tyre exports accounted for nearly 90% truck and bus tyre international markets of north south and central America as also Europe middle east and Africa and several new sizes and pattern of tyre have been successfully developed for international markets as parts of on going emphasis of the company to be a successfully participant in the emerging global scenario. The company has undertaken international trading operations through its J.K international division, which commenced its working and 1999 to augment existing export efforts on the company by adding non company products, exports efforts on the company by adding non company products, exports and import of raw materials leather goods, textiles, marine products, spices etc.. Besides bulk import of food items. The division has also expanded its activities by opening an office in Moscow besides starting business operation through the companies subsidiaries in the U.K and Hong Kong. It has plans to further expand its activities by opening more oversea offices and expects to increase the level of business during the current year.

Raw materials and input costs: There was substantial increase in prices of major raw materials and other inputs. The price of natural rubber touched on all time high of RS 58 per kg during the year against an average of RS 82.41 per kg in the previous year. Besides there was short fall in the availability of natural rubber due to lower production in the country which had to be imported at high costs meet the companies requirements. The price of PBR increased by 11% carbon black by 18 % rubber chemicals by 10%, process oils by

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23 over 40% and coal by 14% besides there was an upward revision in power tariffs, railways freight and other infrastructure costs. These resulted in increased pressure, on margins, which worsened further because of stagnant market prices of finished goods. Radial advantage: J.K Company continues to be undisputed leader of radial tyres in India. Having been he first company to put steel belted radial tyres on Indian roads sixteen years ago. It has come a long way since in design and technological superiority to produce world-class radial tyres. Its innovation and pro-active policies have helped it maintain the largest market share in radials in India. The company is the largest supplier of radials of O.E. manufacturers and the only company in the country and the host of imported passengers cars. The radial tyres for trucks and buses launched last year have performed exceedingly well. This has further strengthened customers confidence and loyalty to J.K tyre The highlight of the year was the launch of the much-published world-class passenger car by maruti the Zen. Which rolled out on J.K steel radial tyres ultimate as original equipment fitment. Thus become the only Indian tyre company to meet the exacting standards of one of the worlds largest passenger car manufacturers SUZUKI of Japan. J.K steel radial tyre also becomes the first original equipment fitment for two more new generations. India vehicles TATA ESTATE AND MAHINDRAS ARMADA these are the achievements of justifiable pride and recently the launch of new radial tyre which can withstand speeds up to 190 kms ultimate the co. Introduced steel radials in India as a mission to make available to the Indian customer companies pioneering efforts have before fruit and the radialisation of the Indian market has taken off. Research and development: -

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24 J.K, s is the first tyre manufacturer in India to have promoted an independent research institute of its kind Haishankar singhania elastomer and tyre research institute continues emphasis on r and d over the years has helped the co to achieve high growth and meet market requirements successfully. The R and D activities are spread over almost all areas of operations and cover developments of indigenous technology. Product design, plant and equipment design, raw materials by manufacturing methods and techniques. Testing evaluation and adoption of technology supplied by collaborators etc r and d efforts resulted in process improvements. Recent developments of the country Working results In the year under review the company achieved a turn over of RS 673.76 crores and increase of 23% over 1999-00. The operating profit for the year was 67.80 crores after meeting the finance changed of RS 8.84 crores, depreciation of RS 10.90 crores, the net profit was RS 18.06 crores With surplus brought forward from previous year at RS 13.66 crores and write back of investments allowances preserve of Rs 0.13 crores, the profit available for appropriation is 31.85 crores. This is proposed to be appropriation is 31.85 crores. This is proposed to be appropriated as under. [Rs in crores] Debenture redemption reserve General reserve Proposed dividends Surplus carried to balance sheet 12.70 5.00 8.25 5.90 31.85 Dividends: -

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25 The dividends are pleased to recommend maintaining dividend of 30% on the enhanced quality capital in addition to the dividends on the preference shares at the entitled rate. The equality share allowed in the rights issue on becoming fully paid up during the year and The equity shares allotted on conversion of PCD shall be entitled to proportionate dividend. The Dividends would absorb a sum of Rs 25 crores as against Rs 4.52 crores for the previous year. J.K INTERNATIONAL GLOBE TROTTING J.K tyre future plans: To consolidate the position in the domestic as well as the international market j.k has grown up an ambitious expansions plan both bias as well as radial tyres. Rapid radiation is expected in the country ushering in demand for such tyres in all segments. The project for increase in passengers and levy radial tyre capacity is progressing well and it is expected to be completed on middle of 2001. The company is also lacking up a project to manufacture all steel truck/bus radial tyres. Balancing and expansion scheme at the balance plant is being implemented as per schedule. The total cost of these project with on going modernization at Jay Kay gram plant is expect to be the order of Rs 452 crores J.k pharmaceuticals: The companys state of the art plant to manufacture 7-ADACA and a range of semi- synthetic cepcephalosporine and their formulations is fast nearing completion at gajraula [up]. It is expected to commence commercial production by November 99. Sripati Singh research and development canter establishment much ahead of starting of commercial

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26 production, has already helped steer a clear path for the launch of several products from gajraula facility in the coming months. Highly skilled and trained personnel are already in place forming the core team for manufacturing. Marketing sales and distribution set up is in readiness for a nation wide launch of j.k tyre company products. Simultaneously several international markets have been scanned and off take is being tied up to achieve an export turnover for the first year itself. J.K PHARMACHEM LTD (JKPL) Jointly promoted by j.k corporation ltd and TIDCO the project to manufacture penicillin gat Guddalore-Tamilnadu is nearing completion to be commissioned by November 2002 with a capacity of 1250 MMU the largest in the country. On the full production this project is expected to save substantial foreign exchange for the country. 1) The central pulp mills limited; As reported earlier, the company along with j.k corp. Ltd has acquired the central pulp mills limited located at Sonagarh, Gujarat, it has a capacity to manufacture 45000 tones per year of pulp and paper after renovation commercial production on paper machine-1 started in November 96 with own pulp. The machine has stabilized and quality of the product has been well received in the market. Paper machine-2 has started commercial production since July 2000. J.k company has received a letter of intent from the government of India to establish a 2500 TCD sugar in the country this project holds good future for the company. Implementation of this project has been taken up

. 2) Commercial paper: -

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27 The company has issued commercial paper for Rs 65 crores. CRISL has granted rating of plt (phone pus) to the commercial paper, which is the highest possible rating Human resource development: Team building and employee empowerment work culture has been the buzz world in the year that then went by HRD today stands out as the single most important and crucial factor in the success of any venture. Extensive training is being regularly imported to keep executive and managers up to date unique. More importantly fundamental insight to organization development and role of individuals in providing leadership to the company and its products has been the focus of several training programmed and interactions.

PARTICULARS OF INSTALLED CAPACITY (per anum)

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28 Production and sales Installed Automobile tyre Automobilestubes Automobile flaps Marine products Agriculture products Other goods Number Production Sales

HISTORY OF J.K TYRES (industry) THE J.K HISTORY AND DEVELOPMENT J.K organization owes its name to late lala Shri Jugilal Singhania a dynamic personality with a brand vision inspired by the cause of the swadeshi movement of mahatma Gandhi and driven by the zeal to set up an Indian enterprise, zala kamala pat singhania founded j.k organization in the 19 t h century ushering in a new industrial in India. The process of industrialization and diversification was worthily and successfully carried on lala kamalapats three illustrious sons sir padarmat, lala kailashapat aided in no small measured by the late gopalkrishna son of sir padampat. J.k pioneering is amply demonstrated by many firsts in industrial products. Some of the firsts are:1993 first in India to manufacture calcio prints, juggilal kamalpat cotton spinning and weaving mills co ltd. Kanpur

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29 1940 first in India to manufacture steel baling hoops for jute cotton and to make the country self sufficient by meeting the entire demand j.k iron and steel co ltd, Kanpur 1949 first in India to manufacture engineering files. J.k engineers files, Bombay. 1959 first in India to set up continuous process rayon plant j.k rayon, Kanpur. 1969 first to manufacture a cyclic fibers j.k synthetics ltd Kota 1973 first to manufacture a cyclic fibers j.k syntheticsfibre machinery fibertech engineers and manufacture, Dadri 1977 first in India to produce steel belted radial tyres for passengers cars, trucks and buses j.k tyres plant, Kankroli 1980 first in world to make steel belted radial tyres for three wheelers j.k-tyres plant, Kankorli 1984 first in India to produce white cement through dry process j.k tyres j.k cement Kota. A central board now pilots the organisation with sri Shankar singhania as president. The j.k industries limited organisation: j.k was initially incorporated as a private company in 1951 subsequently, the company was converted into a public company is located at 7 council, house street, kolkatta and the head office is located at 3 bahadur shah zafar marg, new Delhi. At present j.k has following division and is pursuing an aggressive diversification plan.

Tyres and tubes division: -

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30 Works Jay Kay gram near kankorli dist, Udaipur, rajas than. Banmore plant, near Gwalior. J.k agri genetics with head quarters at secunderabad. International trading division, with head quarters at New Delhi. The foundation stone of the first unit of three and tubes division was laid by the n chief minister of rajas than Sri Harideo Joshi on may 8, 1975 at Jay Kay gram 4, kms from kankorli at about 70 kms from Udaipur. The plant was commissioned in a record time and commercial production on 18 t h January 1997 after having entered into technical collaboration with the renewed tyre manufacture in the world m/s general tyre international company, acorn, Ohio, usa the present installed capacity is around 12.8 lakhs tyres per anum. The facilities include manufacturing capacity for the steel belted radial tyre and all steel radial. In order to meet the growing demand for tyre automobile tyre, management decided to expand further and set up another manufacturing unit at ban more. The plant site is located on the Delhi Bombay national highway, 4 kms from ban more town about 20 kms from Gwalior them dynamic cities of scindias. The plant has an initial installed capacity of 5.7 lackhs tyres per annum (45.4 tons per day and has been set up with initial investment of Rs 130 crores. In the final phase, the plant is to be expanded to manufacture 16 lakhs tyres, 10 lakh tubes and 8.25 lakhs flaps per anum (160 tones per day). In the first phase the product mix will consist of bias construction of tyres for trucks, LCV, tractors, passenger car and jeeps.

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Market shares It shakeout time in the tyre industry and only the fittest are expected to survive the savage skirmish for market shares which has gripped the rs 4000 crore industry. MRF CEAT MODI APOLLO DUNLOP GOOD YEAR VIKRANT OTHERS 15.9% 14.3% 12.4% 10.4% 8.4% 6.6% 5.9% 15.2%

This was perhaps, inevitable over the past three years the tyre industry has witnessed rapid conditions to capacity installed capacity rose from 20 million, tyres in 1989-90 to around 30 million currently. Demand however was not to keep pace and capacity utilization dropped from 84% in 1990-91 to around 70% in 1991-92and it is quite possible that the glut will persist over the next two years. To add to the misery of the tyre major import duties on tyres were cut in budget 1999 from 110% to 50% for the original equipment market and to 85% for the replacement market. Another duty cut is on the cords. This is expected to act as a check on domestic price and only those companies with large volumes will survive. Clearly tyre industry is riding rough train margins are already down Vibrant tyres was the worst. It made a net loss of Rs 6.10 crore for the year ended March 2001. Even market leaders M.R.F Ltd fared badly, with net profits down almost 25% from 20.22 crore in 1998-99 to Rs 16.06 crore in 1999-00.

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32 Despite this slump, ceat tyres M.R.F and J.K tyres industries are on an expansion spree, aimed at the two and three wheeler tyre segments. Apollo tyres are also planning to strengthen its position in the truck and bus tyre segment. Thats strange as these markets are at best sluggish. Thanks to the recession in the truck industry, demand for tyre is falling and with the new motor vehicles AST preventing the over loading of trucks, there is less wear and tear on tyres reducing replacement demand as well more over. The growing popularity of retarding a process by which a new flap of rubber is bonded on to worn out tyres is eating into the replacement market. The raw materials scenario is no better nylon tyre cord and natural rubber-two major raw materials accounting for 33% and 26% of total raw materials costs-witnessed price likes of 35 credit periods have gone up to 60 days against 45 days. Earlier the tyre companies requirements for higher working capitalise resulting in increased pressure in profit margins Although the industry comprises over 25 large and small units manufacturing a range of tyres, the market is dominated by just 5 majors modi rubber, APOLLO tyres, M.R.F, CEAT tyres and J.K industries, who control nearly 70% of tyre production. The truck and bus tyre segment is the most lucrative and dominant one accounting for over 70% of total sales m.r.f is the undisputed leader here, with a market share of over 15%. A major chunt of demand almost 60% comes from the replacement markets and 20% to 25% from the market. Rest is exposed. Intact tyre companies have increasingly restored to exports, even at negligible or nil profit, to improve their capacity utilization levels. Exports thus, have risen smartly from Rs 450 crores in 2000-01. However even at this level exports have not been enough to exhaust inventory build-ups.

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33 The major exporters are m.r.f and modi rubber. Which have taken the lead with shares of 19% each during 1998-99 with an 86% share in columns. Interestingly exports are ballooning despite a glut in the international market as Indian. Companys exports only cross-ply tyres although these are being phased out in the developed countries where radial tyres are increasingly being used a replacement market for cross-ply tyres still exits. Besides Indian companies export cross ply tyres to developing countries too.

Chapter-4 MRT TYRE AGENCIES [Firms profile] Introduction Silent features of the firm Market shares capital structure Dealers role Advantages position of the firm Marketing factors connected with the firm Marketing problems Sales strategy Aid

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M.R.T.tyre agency firms profile Introduction The firm came into existence in 1950 under the name MRT tyres, which undertook the selling of new tyres as well as retarding of tyres. But about five years ago the new tyre selection has been separated under the new name MRTtyre agencies. The firm is situated in garden area, Shimoga that is the ideal location for dealing in tyres because there are many transporters and automobile dealers around them. The firm secured the dealership of j.k tyres it is one of the most popular tyre-selling brands in Shimoga. The firm gets a major share in the selling of j.k tyres. The ideal in all sizes and varieties of tires required for all kinds of vehicle starting from two wheelers to trucks and kinds vehicles starting from two wheelers to trucks and tractors. The firm has doing good business and has made steady progress and now they are one of the leading firms in selling tyres in and around shimoga district. Features of the firm: j.k industries ltd. Through its department in Banglore suppliers tyres to the firm according to their needs and on the basis of the order they receive from the firm. They may even executive an urgent order in one day. Nearness to customers: j.k industries ltd through its department in Banglore suppliers tyres to the firm according to their needs and on the basis of the orders they receive from the firm. They may even execute an urgent order in one day.

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35 Nearness to customers: The firm is also situated in the business part on the main road, with many transporting companies around therefore, the firm is within easy reach of the customers. Parking facilities: The firm is on the main road and parking of vehicles is allowed just in front of the shop. Therefore, customers who come to buy tyres can park their vehicles close to the shop and carry in their vehicles. Near to bus stand: The firm is also situated near the bus stand. This is an added advantage. Customers can take the tyres to their bus and to their destination outside the city without paying heavy transportation costs. Thus the firm attracts a large number of customers. Near to banks: There are two banks on the opposite side of the firm and the dealers bank is just in front of the firm. Therefore, it is very convenient for the cashier to take money to the firm without any risk. The following table shows light into the market shares held by different firms in Shimoga city. Firms MRT TYRES AGENCIES Malnad tyres Unity traders Gowrishankar auto Yejaman enerprises %of the market 48% 34% 14% 8% 7%

Percentage of market shares: Each partner has paid Rs 50,000-00 as working capital. A loan of Rs 8,00,000-00 has been borrowed from the bank for the day-to-day business of the firm.

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36 The firm has employed eight persons as members of the staff consists of one manager, two accountants to look after the accounts of the retarding unit and the new tyre and lubricants sales, one of the them being a part-time employee a typist to maintain correspondence and an unskilled person, appointed as attender, looks after the miscellaneous activities in the office. Two agents have been appointed to conduct the consumers at their doors and provide them prompt service like free delivery of tyres purchased from the firm, trained staff members are appointed to work in the retarding unit to maintain efficiency. The firm is also paying them attractive salary and other facilities like vehicle to the manager and the agents to help them work effectively. The firms pays bonus to its employees every according to the profits earned by the firm. Marketing functions Dealers role: a dealer is an important link between the manufactures and the customers. The dealer buys goods from the manufacturer. Paying his money and sells them to the consumers in the market, and without him here will be no market. He chosses his own channels to reach his customers in supplying the articles of his choice. Functions The dealer is performing a number of functions. Some of the important functions are: 1. Produce local sales representation 2. Provide local inventory 3. Service as a bulk sales center 4. Act as a center for local services

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37 5. Take credit risk and perform billing and collection services from small volume customers. Position of the firm: A dealer acts as a short trade channel between the company and the user. His transaction all in the tune with his companies policies with no middlemen involved, infact, he is an indirect spoke man for the companies. Under this channel the product i.e. company invoices goods to the dealer based on his requriments.the producer makes sure raised directly or through bank with special instructions. Marketing factors connected with the firm: Advertisement: Every dealer has to advise the kind of goods he wants to sell to the customers. Advertisement is the best means to make known to the public that a particular firm in dealing in a particular class of goods. The MRT tyre agencies is spending a great deal of money in advertisement of their dealership in weeklies and other periodicals and annul as to reach all kinds people. They also publish a yearly and private agency to win the goodwill of the public. Roadside hoardings are also put up on roadside to attract customers. Service. The dealers should take care of the customers service as its helps to promote business. There is no doubt that the success of any firm depends on the firm efforts to serve the customers effectively in such matters as free checkup, free transport and delivery of goods. The firm is looking after free delivery of tyres of customers door.

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38 Marketing problems Increase in prices of raw materials: The company has increased the prices of new tyres due to increase in prices of raw materials, like natural rubber petroleum products, nylon fabrics, carbon black etc. Recently the company has increased the prices of new tyres. Consequently truck owners are going for retard tyres that also give a good mileage. 1. New life for old tyres: When the new tyres are worn out, the truck owners should replace them with the new ones. But they are going for retard tyres the retarding industry is also able to assure the retard tyres the same mileage as the new tyres. Therefore the customers find it convenient to use their old tyres instead of new ones. Heavy tyres: The tyre industry has to pay heavy taxes, which is a major problem the industry faces today. They have to pay customs duty on import of natural rubber and excise duty in the tyres produced in the country. The government is also collecting sales tax and turnover tax. As a result the prices of new tyres. Credit facility: Since, the customers ask for credit facility in purchasing new tyres, the unit is facing the problems so adequate finance. High bank commission: The bankers are charging very high commission and it certainly affects business. Sales analysis: -

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39 Sales strategy: The MRT tyre agency is one of the leading firms marketing j.k tyres. An increasing trend is noticed in the sales of tyres. The dealer sells tyres of all sizes. If a particular tyre is not available, dealer will get the required tyres within three or four days from the manufactures. Now the j.k tyre has started sending tyres on credit basis. This is done against a deposit made by the firm to the extent of Rs 50000/- and the company supplies tyres worth two times of the deposit amount. The credit amount must be sent by the date of invoice. This helps the firm to save bank commission since. The company will send lorry firm to save bank commission since, the company will send lorry receipt through post to the firm. If the goods are in order and the firm requires it, it can release the tyres from the lorry office. The firm sells the tyre through advertisement and sales personal and thus the firm earns good profit. All these marketing activities have helped the firm to achieve a good target of sales in new tyres. the table below shows the sales figures for the past 7 years. Years 1996 1997 1998 1999 2000 2001 2002 Car tyres 25 32 36 36 44 48 53 Truck tyres 160 190 220 249 250 301 356

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40 From the above table it is noticed that the firm has improved its sale of j.k tyres year after year. It also speaks of the tremendous effort put in buy the marketing personnel and the firm to set up sales.

Aid: If the firm has to remain in market and earn a reasonable profit concessions must be given to the firm by the company. The company has been giving a certain percentage of discount from the company on conditions that the bill is realized from the bank within the stipulated period. However the company has changed its policy. This is to help the firm when it does not have enough money to place orders for new tyres to increase sales. The j.k tyres now allow the firm to deposit a fixed amount with the company. The company will send tyres worth time the value of the deposit. The firm has to pay the bill within 30 days from the date of invoice the firms will forfeit the discount offered by the company. In this competitive market it is advantages for the firm to get such discounts from the company. Procedure adopted by the j.k company in adopting a dealer. The following factors are to be taken into account while selecting of particular dealer. 1. The eligibility and willingness of the dealer to handle the products. 2. Credit standing of the dealer. 3. Dealers knowledge about the product characteristics and its market. 4. Eligibility to maintain sufficient stocks of the market. 5. Capacity to secure business 6. Ability to cover the territory or areas over which goods have to be sold.

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41 7. The other goods in by the dealer whether they are allied products or competitive products 8. Ability to arrange for repairs and maintained of products and if needed. 9. The dealer willingness to co-operative with the manufacture in maintaining stable prices. The dealer should have interesting dealing with that particulars class of goods. He should have the ability to make the customer to buy the products. He should have the willingness to serve as a dealer for the class of goods for which is appointed for. The company also takes into consideration the credit worthiness of the dealer. He should make a prompt payments to the company even though his customers purchase the goods on a credit basis. He should have the power to contact with the company as well as the customer simultaneously. It is the duty of dealer to know about the product. Its characteristics before he is appointed as a dealer. It is necessary that the dealer should have same knowledge about the product and the market. Dealer cannot survey in the market for the long period.

Chapter-5 Analysis of survey

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42 Frame work and finding of survey.

Frame work of the survey To obtain the consumers attitude, about 30-35 consumers were interviewed and around Shimoga dist. These include bus operators and lorry owners. Survey is conducted on random sampling basis. Survey is conducted through personal interview with a questionnaire. 1. The following table shows the classification of respondents as per routes. Routes covered Total respondents no of Percentage

Out of 25 respondents interviewed 13(52%) are of the opinion that the route covered is along distance, 7(28%) is short distance 3(12%) is inter state service and 2(8%)is local services. 2. The following table shows the classification of respondents as per vehicle used. Vehicle Total no of Percentage

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43 respondents

Out of 25 respondents interviewed 13, persons were truck owners 8 were bus owners and two belonged to LCV category. 3.the following table shows the classification of respondents as per tyre they use. TYRES Total respondents no of Percentage

4.the following table shows the classification of respondents as per size they use. Routes covered Total respondents no of Percentage

Out of respondents interviewed 7 are using 10,00-20, 16 are using 9.00-20 and 2 are using 8.25-20 tyres 6. The following table shows the classification of the respondents as per patterns. Pattern Total respondents no of Percentage

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44 Out of 25 respondents interview 2 persons are buying lug, 8 persons rib, 13 persons semi lug and 2 persons rib and lug. 7. The following table shows the market share the market of different brand of tyre in Shimoga district. Pattern Total respondents no of Percentage

In Shimoga district, J.K TYRES has a market share of 92% followed by the MRF with 48% followed MODI 30% CEAT24% VIKRANT 16% APOLLO 8% BIRLA8% 8. The following table shows the opinion of respondents who own j.k tyres. Pattern Total respondents no of Percentage

Out of 25 respondents 6 respondents told that it is not bad 16 respondents told that it is good. The remaining 3 respondents told that it is very good. 8.the following table shows the opinion of respondents about the price of j.k tyres.

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45 Price Total respondents no of Percentage

When the respondents were asked about there price of j.k tyre 3 respondents felt that it is expensive 22 respondents felt that the price was reasonable.

9.The following table shows the type old facilities the respondents expect from the dealer. Type of service Total respondents no of Percentage

About the service facilities 4 respondents informed that they expected after sale service from the dealer 2 respondents informed that they expected the facilities of credit 19, respondents informed that they expected guarantee facilities from the dealer 10.the following table shows the market share of different tyre firms in Shimoga Firms Total respondents no of Market

When the respondents were asked from where would they buy a tyre if they intend to buy 11 respondents informed that they buy in MRT tyre

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46 agencies 8 respondents in malanad tyres, 3 respondents in unity traders and 3 in others. Survey findings To obtain the customers attitude about 30-35 consumers were interviewed in a around Shimoga District. These include bus operators and lorry owners. Who have more than 2 buses or lorries. They are of the opinion that the tyre which gives good mileage and better service is considered as best tyre, of these many of them are of the opinion that the j.k tyres is the best tyre which can be fitted to their buses and lorries which provides good initial mileage and service. Further the consumers buy the tyres from those shops which offers them free service, credit and guarantee for buying tyres, which they need for their vehicles. According to the survey made the consumers are buying mostly from the MRT tyre agencies. The consumers buy the tyres considering the factors like mileage and economy while purchasing the new tyre and they will not take into consideration the price factors. Many of the customers are of the opinion that the price of the j.k tyre is not enough high but are reasonable according to the present circumstances. Finally I can say that the firm, which extends good support to its customer, will help the firm to increase the sales of the new tyres.

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Chapter 6 Suggestion and conclusion

Suggestion and conclusion Selling new tyres: In selling new tyres customer must be taken in to consideration as he is with any other product for sale. The customers accept those products, which are of high sales factor, and of course economy is sure to find a good mileage when he uses j.k tyres. The tyre industry in India has made a considerable progress during the last few years. The company is gaining a good amount of profit and giving a good amount of dividend to its shareholders. As the sales

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48 increases the profitability of the firm increases. If the customers do not have any knowledge of the maintenance of the tyres it is the duty of the dealer to make it now to the customer the procedure for maintenance and to secure maximum mileage for his new tyres. Thus it is the duty of the dealer to make the customer to get his tyres a good mileage and to bring down the cost of operation. This can be done by intensive customer contact by the dealer and keeping his eyes open for spotting defects, which a customer commit during his, maintains of tyres. The dealer should employ agents for consumer contact and train them to explain the operation of maintaining the tyres to get a good mileage. Competition: Competition in any trade is required but it should be healthy. Competing in price will ultimately and in failure. There fore, the competition of new tyres should be on the guarantee, service and other facilities, which are offered by the dealer. In the tyre market the rates of different tyres will very to some extent because some tyre dealer quote high profit. But if these facilities like services, guarantee all offered by the dealers the customer will ignore the price factor. The other dealer should conscious about the prices in the market and should quote the prices, which are quoted by the other dealers. As for the dealer it is quality, and service that counts and not the price of the new tyre.

Extension of credit facilities:Todays business atmosphere is filled with un-certainties and is highly competitive in venture. Under these circumstance credit has become pre-requisite not only for the growth but for the every

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49 existences of any business venture. The firm is giving credit facilities for a period of 30 days to the reputed customers. There should be extension of credit facilities for the survival of any business. Indiscriminate extension of credit to all the customers may totally destroy a venture. Hence almost caution should be taken by the management while giving credit facilities in the purchase of new tyres. These factors will help the management for its expansion and growth. A good monitoring system thus becomes to an effective credit control system. The credit control may be successful only when the activities of whole marketing team and agency network are effectively coordinated and guided on a day-to-day basis by the management. Out standing a statement has to be updated and the latest figures should be available with the decision making man at any time. This statement should categories the receivables credit rating of each and every customer in the territory has to be made and should be available with the decision making man at any time. This statement should categories the receivables credit rating of each and every customer in the territory has to be made and should be available with the management. This outstanding records of each customer credit rating is an indicator by which the management is able to judge the financial status and the payment capacity of any individual customer. They should also indicate to show how much of their money is safe with that particular customer. The rating is a hypothetical figure and is arrived on the basis of in depth analayse of in depth analysis of the customers fleet strength, family background characters, social status and other business activities involve where as he has business partner and if so what is their financial and social status, present and past expensive of the firm

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50 on the numbers of tyres sold and the prompt payment of receipts from him, rating of his financial status by local business circle in general etc. Customers can be categorized as under on the basis of the above information collected:1. Very good and prompt pay matters 2. Reasonable good paymasters 3. Payment offers regular and follow up with managerial delay. 4. Very good paymasters. The outstanding of customers such as prompt paymasters and good paymasters need not to be bothered much even for an occasional delay in payment and all efforts of the sales and agency team must be concentrated upon the marginal delay payers and bad pay masters. Efforts of the sales cell should be directed towards collecting the outstanding of customers, the manager of the firm should review the outstanding daily in the morning and direct the marketing team to close up the outstanding which fall within 30 days and above. This sort of emphasis in due course will help the management to see that the credit limits are not exceeded beyond a limited level. This would also help the management to effectively channelises the available forces for effective purposes and minimize wasting of time and efforts. Customer periodically and take precautionary measures in the future dealing with those who have some reason become very bad paymasters. This will help the management in due course to get a good control over the credits and also ensure on less of bad debts. Service: -

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51 No business can survive in the absence of required customers service. The tyre manufacturers are trying to educate the operators on the importance of maintenance of tyres and to achieve lowest cost price. The popular among these are: 1. Correct load and inflation. 2. Proper care of rims and use of correct sizes 3. Matching and rotation of tyres 4. Correcting the mechanical irregularities. 5. Selection of light tyre for the right job.

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