Launch of Amaron Automotive Batteries

Section B - Group 5S V Vyas Reddy (13106)

Rajendra Kumar Bansal (13105)Priyanka Sharma (13103)

Mayank Gupta(13093)Davis.N.S (13079)

About ARBL Company

Amara Raja Batteries Limited was started by Ramachandra N. Galla, in 1985

First to manufacture sealed maintenance free valve-regulated lead acid (VRLA) battery for Industrial Applications in India

Market leader with 40% share in stand-by VRLA battery in

India

Largest in Indian Ocean Rim and amongst top 10 in world

Technical collaboration with Johnson Controls

Market Information

Storage Battery

Industrial Battery Automotive Battery

Overall 62% market shareValue of Rs. 160 billion

Replacement segment

Share of market leader Exide is 25%Dominated by local players and other non-branded batteries

Original Equipment Manufacturer

segmentShare of market leader Exide is 90%

What arbl did?

Analyzed market Decided to target replacement segment They worked on following aspects mainly:

Brand Product Distribution Network Promotion

Features Non-corrosive plates High heat resistant technology Low reaction rate due to which consumption of water is

less

Performance Quality Low Maintenance Leak Proof Battery Matches India’s extreme weather conditions

Durability Long Life

Product Differentiation

Style Fluorescent on black Brash and loud ‘in your face’ font

Design Convenient fold down handles Charge indicator Fancy wends, ribbed side walls

100 pit-stops across the country Standard store design Rugged and functional environment inside

the store Distributing products to 7250 retailers Planning to distribute through departmental

stores

Services Differentiation

Promotional Strategies

Humour as a platform for promotion Clay models + animation was used for advertising Hinglish Lyrics to make brand youthful and sporty Innovative field promotion Association with sports events Sponsored Go-Karting competitions Narain Karthikeyan as brand ambassador

Outcomes

Captured 6% of replacement market within 3 years of product launch

By making a mark in the replacement market, the company is also gaining ground in OEM market

Private label’s program to manufacture batteries for other brands

SWOT Analysis

STRENGTHS Positioning(Lasts Long, Really

Long) Features Promotion Strategy Performance

WEAKNESSES No prior experience in

automotive industry

OPPORTUNITIES Highly unorganized replacement

market. Excide is the only major player

with market share of 25%.

THREATS Competition from Exide in OEM

segment Local brands can penetrate

market using cost leadership strategy

Question 1 : When the OEM market is the key segment in the automotive battery industry, why did Amara raja focus on the replacement market?

It was difficult for ARBL to penetrate and gain market share.

Exide was market leader in OEM market with 90% market share.

Where as replacement market was highly unorganized.

Exide was the only major player having a market share of 25%.

There was a scope for better price realization.

QUESTIONS

Question 2 : What should it do to increase market share of replacement batteries?

Make a deal with local dealers, service stations and give them promotional offers

Product - Added Features like Battery life indicatorPrice - Exchange offers for older batteries .Promotion - E-advertisement, automotive magazines

and websites.Provide replacement guarantee and extended

warranty.

Question 3 : In what way does branding help Amara raja to market a low involvement product like automotive batteries?

High brand recall by effective positioning Visibility in the market – branding creates brand

awareness amongst people which will make consumer influence the buying decision in future

Question 4 : What should ARBL do to penetrate the OEM segment?

Segmenting on the basis of Vehicle categories (HMV, LMV)

Customization based on ampere rating

Coordinating with OEM’s internal engineers in order to meet their technical and quality standards in the most cost effective manner