Individual assignment

Brand management study

of

By
Gaurav Modi
Roll no. 2009082
 Launch of the brand
The Bridgestone launched its brand in India in 1997 as bridgestone India private ltd. by setting
up a factory in Kheda growth centre Dhar M.P. The brand was positioned in the premium
segment it ventured into the passenger cars segment exclusively in India. At the time of its
launch it had to penetrate the Indian market by competing with Indian giants like MRF and Ceat
and also against Goodyear. All of its competitors had a share in the truck and two wheeler
segment as well. At that point in time it had to give a lot of dealer discounts and incentives to
motivate a very diificult tyre dealers network in India.

Its emphasis on quality and also the demands of the Indian roads required it to manufacture a
different range of tyres for India. These tyres were priced at a lower price than their Japanese
counterparts. This move of Bridgestone India led it to be a winner in the long run in Indian tyre
market. It also took advantage of coming to the Indian market earlier than other competitors like
Michelin, Continental Pirelli etc. The brand tried to do a lot of research in the car tyres to give it
an advantage over its competitors also they focussed on quality and saety which came to the fore
in their endavours.

The time of launch of the brand was faced with good opportunities and open and supportive
regulatory norms from the Govt. India had then just woke up to globalisation and all the local
brands were largely caught napping. The communications of Bridgestone were done through bill
boards and seminars held for its delaers. The company had at that time the s322 and s248 series
manufactured in India for the Indian road conditions and also tyres like donuts and potenza G3
manufactured in Japan for a premium. Bridgestone’s launch was almost perfect in lot of respects
and the various strategies that allowed Bridgestone to succeed were

 Setting up a special manufacturing plant in India and thus avoiding the import duties etc.
 Producing tyres suited for the Indian roads and also at better quality than the Indian
counterparts and also Goodyear.
 Incentivising the channel partners and providing them with great offers and support.
 Timing its launch correctly well before the western world woke up to India and also when
their was a lot of unhappiness amongst the customers against the existing brands.
 The company also maintained good transparency in its returns handling and accounts
department.
 They chose to enter with a select few dealers in the beginning but wuickly woke up to the
need for having a more intense channel distribution.
 Optimum use of advertising and not going compulsively for the broadcast media.
 Enterring into a segment with high and sustainable growth.
 Understanding the psyche of the customers aptly and hitting the bulls eye in terms of
product positioning.
 Continuing with the tube type tyres to maintain good numbers in sale as well as penetrate
the rural markets.
 Journey of the brand over a period of time
The brand 4-5 years after its launch evolved to being a pull brand. The demand for the company
grew steadily and so did the range of products. They introduced the new turanza range of tyres
and also made the B250 tyres for Indian conditions. Bridgestone had evolved from a niche brand
to a mass brand aquiring market share as well as consumer preference in India. The brand was
stocked with almost 70 -80 % of the dealers. At the same time Bridgestone’s arch rival Michelin
launched in India. Michelin positioned itself as a premium brand and initially dint look at market
share. In mid noughties came the nightmare of Chinese tyres. They launched an assault on all the
companies by positioning through cost leadership a particularly successful formula for the
commercial segment. Bridgestone due to its markethold started withdrawing the incentives given
to its dealers. It focussed on giving free gifts to the customers like umbrellas bag packs tshirts
etc.

The import duties and entry barriers further reduced during the noughties coupled with the high
growth witnessed by Indian economy propelled the entry of many of the competitors into India.
The market for car tyres was growing at a frantic pace and the foreign car manufacturers also
brought their brands to India. This point in time bridgestone continued its innovation policies and
emphasised on its value proposition of passion for excellence. But unfortunately the Indian tyre
manufacturers fell to a deep low being stagnant in their strategies the market was dominated by
bridgestone and to some extent by MRF with a constant decrease in its market share. Goodyear
india managed to repell a lot of its customers through lousy service and very highly defect prone
tyres. Bridgestone’s work was made easier through its competitors undoings.

Bridgestone had two pitfalls during this journey

1. The high pilferage of its promotional freebies. Almost 80% of the free products
distributed by Bridgestone were not passed on to the customers.
2. The withdrawals of incentives from its dealers led to anti marketing of its products. The
dealers suggested that the money spent on futile promotions be rather passed on to the
dealers.

Leveraging of brand equity

The predecessors of Bridgestone began making diversified products in the 1930s, soon after they
started making tires. Today, Bridgestone diversified operations encompass automotive
components, industrial products, polyurethane foam products, construction materials, parts and
materials for electronic equipment, bicycles and sporting goods. Diversified business generates
about one-fourth of total sales in the Bridgestone Group.

Automotive parts are an especially large line of business for Bridgestone in diversified
operations. Bridgestone supply automakers with vibration-isolating components, such as engine
mounts. Bridgestone also supply air springs for trucks, automobiles and train carriages.
Bridgestone market aluminium wheels and other automotive accessories, too.
Industrial products

Bridgestone's industrial products span a vast range of items. They include polyurethane foam for
automotive seats and interiors, for bedding and furniture and for insulation and sealing in
appliances and buildings; water hoses; marine hoses for loading and unloading oil tankers;
specialty precision hose products, such as wire-blade hose for construction equipment and
machine tools; conveyor belts; and rubber tracks for crawler tractors. Additionally, they make
retreaded tires for aircraft. Their corporate headquarters for the Bridgestone Aircraft tire division
is located in Miami, FL,

The Bridgestone product line in construction and civil engineering materials is similarly broad.
Bridgestone supply Multi-Rubber Bearings for installing in foundations to protect buildings from
earthquakes, inflatable rubber dams for managing waterways (no longer manufactured - 2008),
marine fenders for protecting wharves, additives for pavement, waterproofing sheet, rubberized
ceiling and roofing materials, panel tanks for storing water, bath fixtures and residential flooring,
air and water systems.

Bridgestone's line of products for electronic equipment includes precision rollers for office
machines and functional films for solar cells and plasma displays. In sporting goods, Bridgestone
market golf balls and clubs and tennis balls and rackets. Bridgestone's line of bicycles is Japan's
most extensive bicycles.

On December 5, 2006, Bridgestone Americas and Bandag Inc. announced a merger agreement
which will see Bridgestone acquire Bandag, a leading tire (mainly truck) re-treader with over
900 franchised dealers worldwide. Bridgestone's president in Tokyo explained:

Higher fuel prices are prompting customers to cut costs [by using retreads]. It takes time and
“ costs to develop this size of business. We were able to get that all at once. ”
The transaction is valued at approximately US$1.05 billion. On 31 May 2007, Bridgestone
Americas acquired the outstanding shares of Bandag Stock for US$50.75 per share. Bandag is a
world leader in the retreading business and is based in Muscatine, Iowa. The name of new
company has become Bridgestone Bandag, LLC and Saul Solomon has been appointed to the
position of Chairman, CEO and President of Bandag. Previously, Solomon served as Vice
President and General Counsel of BSAH. Bandag’s headquarters will remain in Muscatine

The Bridgestone Cycle Co Ltd originated in 1949. It offers bicycles under its own brand and
under the Anchor brand.

Bridgestone Aircraft tire

Bridgestone Aircraft tire (USA) is a manufacturer of aircraft tires as well as retread servicing.
Bridgestone America's Holdings announced in May 2006 that it would be moving its Miami, FL
aviation operation to its new 160,000-square-foot (15,000 m2) facility located in Mayodan, NC,
this move is expected to be completed by mid 2007 and will create approximately 95 new jobs.
CEO and President of Bridgestone Aircraft tire (USA) Joe Rayna is quoted as saying; "This
move allows us to continue to prepare for a changing market, both in demand and in product
mix, New modern aircraft, such as the Boeing 787 Dreamliner and Airbus A380, arrive fitted
with new Bridgestone technology aircraft tires, and this new facility will complement that
technology". Bridgestone Aircraft tire (USA) has been a major supplier of aircraft tires and
retreads to the aircraft industry for over 70 years and has sister aviation facilities in Tokyo, Hong
Kong and Belgium.

Golf Products

Precept Golf is a division of Bridgestone, and is the brand name under which Bridgestone's
Golfing Products are marketed. Bridgestone has been producing golf-related products since
1935. The Golf division of Bridgestone currently produces both clubs, balls and accessories.
Along with technical developments in tire technology came breakthroughs in golf ball
technology that have led Bridgestone to be the number one golf ball producer in Japan.

Design and production of golf clubs followed in 1972 propelling Bridgestone to a leadership
position in the current marketplace.

Conveyor Belt

Production of Bridgestone Conveyor Belts started in 1945. Since then, they have been installed
in countries all over the world. Bridgestone Conveyor Belts have demonstrated their reliability
on serving vital processes such as handling coal at continuous operated power plants and
transporting raw materials at steel plants and cement plants where downtime is very costly.

Panel type water tank

During the early 1970s, Bridgestone Corporation introduced its first GRP (glass fibre reinforced
plastics) Sectional Panel Type Water Tanks into the Japanese domestic market. The
overwhelming success realized during the period, early 1970s to mod ‘70s, domestic applications
prompted Bridgestone Corporation to introduce the product to markets, overseas. This water
storage system is found to be one of the most ideal for the storage of natural potable/drinking
water below 40 deg C.

Since the inception of the GRP Sectional Panel Type Water Tanks business; Bridgestone
Corporation’s continued strive for excellence together with feedbacks on performance have
resulted in vast overall improvements and durability of the water storage system. The feature of
external flanges for both sides and base panels has ensured that most inspection and maintenance
works could be carried out from the outside of the water tanks; thus minimize disruption of
service.

The brand as it stands today

Bridgestone hope’s is that its customers will trust the safety of a product because it carries the
Bridgestone name, a true mark of quality. They are committed to working to make life safer and
more comfortable for all our customers. They are also working diligently to earn and maintain
the trust of our customers, employees and communities, while taking pride in the esteem in
which the Bridgestone name is held around the world. The pride that comes from such well-
earned trust is the spirit that motivates the employees of the Bridgestone Group worldwide.

Bridgestone’s corporate mission is to “serve society with superior quality,” words used by
Bridgestone's founder Shojiro Ishibashi to describe his vision for the company. Superior quality
is not merely a goal to which we aspire in connection with our products, services and technology.
It is something that we pursue in all of our corporate activities.

This “spirit” and “mission” form key elements of the Bridgestone Way. They provide an
unchanging direction and motivating force as they work together to become the undisputed No.1
tire and rubber company both in name and substance.

The Bridgestone Way

Spirit
“Trust. And Pride”

The trust that we earn from people in the community makes us proud of our companies. Our
pride in our companies encourages us to do ever better in exceeding people's highest
expectations. We earn people's trust by providing products and services that make life safer,
more fun and fulfilling. That trust becomes visible to us through our interaction with customers
and with all the members of the community. It makes us proud of our products, of our
companies, of each other.
The crucial linkage between the trust and the pride is action. Only through concrete action can
we earn the trust that becomes the basis for our pride in our companies and products. Only when
that pride motivates us to become ever better, can we continue to earn and retain the trust of the
community.

Mission
“Serving society with superior quality.”

We inherit the words and the spirit of our mission from our founder. His emphasis on superior
quality means striving for excellence in technology, in products and services, and in all our
activities.
The quest for excellence is a quest for every individual at every Bridgestone company. So we
encourage each other in the spirit of mutual respect and help one another make the most of our
potential. Our commitment to quality is a worldwide commitment. We share the values of the
community, including the universal desire for a sound environment. And we work
conscientiously to improve the quality of life for people everywhere.
Management Stance: Our seven core emphases

1. Focus continuously on the future and pursue continuing growth in corporate value.

2. Be fair, honest and open in our corporate management.

3. Understand and honor fully the ethical values, moral practices, and legal regulations of
every nation and region where we operate.

4. View ourselves through the eyes of our customers and adapt our approach responsively to
exceed their expectations.

5. Build positive momentum by nurturing capable, motivated employees who, in turn, will
foster a stronger company.

6. Take our future into our own hands by leading our industry in introducing innovative new
technologies.

7. Maximize our collective strength by sharing information freely and promoting

cooperation among divisions and companies in the Bridgestone Group.

Our Pledge
To the community

 Bring added benefit to the community through support for cultural activities and other public-
interest undertakings.
 Be proactive in working to protect and improve the global environment.

To customers

 Contribute to continuing advances in the fundamentals of safety and in other basic elements of
the quality of life.
 Convey our passion to customers through innovative and exciting new kinds of value that
capture the imagination.

To shareholders

 Maximize shareholder value through continuing growth in sales and earnings over the long
term.
 Fulfill our accountability to shareholders and distribute earnings to them through reasonable
and stable dividend payments.
To business partners

 Concentrate on advancing mutual interests through close communication in all dealings with
partners.
 Identify issues of common concern and work together on improvements to resolve those issues.

To employees

 Honor individuality and provide a safe and stimulating workplace environment.

 Provide opportunities fairly to all employees and evaluate their performance on the basis of
effort, as well as results.

Practical Guidelines

1. Understand the perspective of customers and other members of the community

2. Tackle work with passion

3. Solve problems quickly and thoroughly

4. Emphasize communication and teamwork

The Bridgestone Group has established at its core a management goal, management stance and
fundamental management philosophy.
Apart from a pursuit of superior quality in all our corporate activities — beginning with
products, services and technologies — we respect the cultures and values and comply with the
laws and regulations of the many places where we operate.
We are also committed to protecting the environment in each of the countries in which we
operate.

Goal, Management Stances, Fundamental Management Policies

Goal

To establish the status of being the undisputed world No.1 tire and rubber company both in name
and reality.

Management Stances

1. Basics and Principles

To always bear in mind business Basics and Principles
2. Philosophy and Spirit
To keep “Philosophy” and “Spirit” since the time of corporate establishment and to
follow “Bridgestone Way”
3. Domestic, Japanese, Business
To solidify its business footing
 4. Business Development
To proceed with the group and global business development on a foundation of the strong
Japanese business

Fundamental Management Policies

1. To always aim for “the higher level” and to be the best in the world in all of our products
and services
2. To clarify the long-term strategy and to proceed with the integration and expansion of
business domain
3. To aim for the real global corporation, adopting the SBU (Strategic Business Unit)
organization
4. To aim for the optimum management for the entire group, utilizing Mid-term
Management Plan

Bridgestone India has seen a large shortage in its inventory for almost 2 years now. The constant
increase in prices of bridgestone is also not a welcome phenomena. It has also tightened its hold
on its dealers by reducing their authority drastically. It demands for a 100% stocking of only
bridgestone products To open a Bridgestone shoppe. Now if a dealer wishes to get extra discount
on its products it has to open the shoppe but forgoing the other brands in its shop. Bridgestone
has competitors in the domain of high quality from yokohama and michelin and for low price
from chinese tyres and goodyear. The position of its brand has gone very hazy due to this
environment. Yokohama has positioned itself quite well as a competitor of bridgestone giving its
japanese make tyres for a lesser cost than Bridgestone’s Indian make. Also their brand equity
stands on similar grounds due to their common source of origin thus threatening the Bridgestone
brand even further. Bridgestone also has come up with a policy of creating more and more small
dealers by easing the norms of dealership which has further diluted the brand. The company also
faced a few problems due to the ISI certification mandation by govt. and withdrew the
production of some tyres due to the same. The increase in vat also caused a hic-up in its sales.

The road ahead

Bridgestone to Establish New Plant in India Bridgestone Corporation announced that its
subsidiary in India, Bridgestone India Private Ltd., will establish a new plant near the city of
Pune, Maharashtra State. This new plant will begin passenger car radial tire (PSR) production
and truck and bus radial tire (TBR) production in response to increasing demand for these tires in
India, which is seeing marked economic growth. Total investment will be approximately ¥50
billion. PSR production is scheduled to begin in January 2013, and TBR production is scheduled
to begin in August 2013. By year-end 2020, production capacity is slated to reach approximately
10,000 units per day for PSR and 3,000 units per day for TBR.

Bridgestone India is looking to offset the shortage of its tyres in India by establishing a tyre
manufacturing plant and is constantly looking to diversify its product portfolio and to create
more appeal in the premium segment. Bridgestone is also growing into the truck tyres market
and has already increassed the emphasis on the radial and tubeless tyres across its product range.
 Suggestions
Bridgestone should continue to emphasizse on its quality principle and should share some of the
gains that it has achieved with consumers and retailers both. The distribution channel which is
very important in tyre industry should not be diluted and the association with sports and other
activities should be increased.

The promotion tools used should include print media more extensively and the use of PR and
internet to good effect should be emphasised on. The increase in competition demands the
company to be more prudent in its communication and come out of its shell. The product
portfolio should also be leveraged more towards car enthusiasts which make for the principle and
growing customers of automobile in India.