Like the market leader MRF, Apollo wants to offer tyres for every category of vehicles, and using a big star is a great way of energising the brand.
T E Narasimhan reports.
When Apollo Tyres signed up Sachin Tendulkar, who had spent the better part of his cricketing career as the face of rival tyre brand MRF, it was widely perceived as an industry coup.
It was also remarkably uncharacteristic.
For a brand that had never signed a celebrity before and plays second or third fiddle across the segments it competes in, it marked a big shift in terms of positioning and also marketing budgets.
While the company says this is part of a conscious effort to build high recall and mass recognition for the brand, experts spot a challenger brand finally stepping up to expand its turf.
The company that has been keen to re-position itself for a while now, says it is seeking a place alongside global tyre brands.
To that end, it has upped the expenditure on research and development and in marketing the brands in its portfolio.
“We are working towards acquiring greater operating leverage and longer-term benefits.
"The two main pillars (for future growth) would be technology and branding,” says Satish Sharma, president, Asia Pacific, Middle East & Africa, Apollo Tyres.
Apollo has expanded its product range in recent years and its market share is estimated to be around 30 and 29 per cent in commercial vehicle (original and replacement respectively) and 25 and 16 per cent in passenger vehicle (original and replacement).
MRF is the leader in both these markets.
In 2016, Apollo entered the two-wheeler tyres market where it has 5 per cent market share, where MRF has close to 30 per cent.
While this is a long way from the years when a family feud wracked the business and its tyres were more a commodity purchase, Apollo sees an opportunity to add speed to the wheels that power its brand.
It wants to build a unique identity for itself, as an Indian brand with a global footprint.
The company purchased the Netherlands-headquartered Vredestein (tyres for car, agricultural and industrial equipment and bicycles) a few years back to gain a foothold in Europe and now it plans to bring the brand to India and position it at a premium.
“Using a big star is a great way of energising the brand.
"So Apollo is obviously trying to energise the brand; never mind that MRF is ahead of them, there are plenty of options that it can exercise when it comes to looking at new ways of approaching the market,” says Harish Bijoor, founder-CEO Bijoor Consults.
Apollo has in the past five years, say tyre dealers, worked steadily to make sure that it gains an increasing share of the aftermarket.
Its early bet on radialisation of commercial vehicle and later passenger car tyres too paid off and it now sells 500,000 tyres to car makers a month.
The company wants to create a dual brand structure in the country for this segment where Vredestein is accorded a more premium status, expand the product range, penetrate the rural markets with full range play and develop new products.
Like the market leader MRF, Apollo wants to offer tyres for every category of vehicles.
In doing this Apollo is following in the footsteps of market leader MRF.
Bijoor says, “Quality is important and the ability to deepen the perception of good quality tyres for Indian conditions.
"MRF has done that continuously and the country is so large that it isn't enough to be served by one player as a dominant player, but you need may be six to seven great players in the market. Apollo has that potential.”
Apollo has increased the spending on its brand in recent years and estimates it at around 2-3 per cent of sales.
Total trade and marketing spend, the company claims, at close to 6-7 per cent of sales, is an industry high.
The newly launched campaign has Sachin Tendulkar endorsing the brand’s national presence and rootedness in local culture, to the tune of a brand anthem composed by A R Rahman.
“Like the brand, Sachin too, in his journey has gone from milestone to milestone beating every hurdle,” says Sharma.
The essence of brand Apollo is the spirit of ‘go the distance’ and that is what the song and Tendulkar embody according to the company.
Photograph: Courtesy, Apollo Tyres.
