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RELEVANCE OF BRANDING

Raman Rajagopalan considers every challenge an opportunity. He thrives amid all kinds of adversity. Obviously, this is the quality that has made him what he is now: Managing Director and CEO of CEAT Kelani Holdings, market leader in the country’s commercial vehicle tyres, radials and three-wheeler tyres.

He took over the current position of in April this year at a time when the tyre and rubber markets had been undergoing unprecedented churning. Competition was heated, and wooing the customer had become a difficult task. Thanks to his exposure to the pulls and pushes of the market while he served as CEAT Kelani’s Vice

President for commercial and business operations, he was aware of and very knowledgeable about the intricacies of growing in a tyre market that is highly competitive.

CEAT, headquartered in India, has developed its products as a global tyre brand. The company’s roots can be traced to 1924 in Turin in Italy. CEAT stands for Cavi ElectriciAffini Torino or Electrical Cables & Allied Products of Turin.

Today, as Sri Lanka’s top tyre-maker, the Indo-Sri Lankan joint venture has won National Business Excellence Awards in 2010, 2011 and 2012 sponsored by the National Chamber of Commerce of Sri Lanka.

CEAT Kelani has three manufacturing units producing truck, light truck, radial, motorcycle, three-wheeler and agricultural tyres. With a work-force of over 1,000 people, it has reported revenues of US$75 million and exports of US$23million this year.

Rajagopalan was one of the key persons in helping the turnaround of the company. Under his stewardship, CEAT Kelani has emerged as a world-class company.

He leveraged modern business management strategies and applied his hands-on experience in building effi cient supply chains. He brought compelling changes in retail operations.

His over two decades of experience in managing start- ups to running multinational companies came handy in revamping CEAT Kelani Holdings. He has a record of strong leadership and a practical management style that is centred on impact-driven strategies. He is also a focussed leader with repeated success in multiple industries.

Elaborating on the vision that he has set for his company, Rajagopalan told Polymers & Tyre Asia that currently he is in the midst of implementing a corporate vision document. The company’s senior management team has deliberated and formulated “Vision 2016” that envisages developing a 60%+ market share by 2016. By that time he wants to see the turnover touch above US$125 million.

Rajagopalan visualises CEAT Kelani to be among the top 20 most recognised brands and wants to further improve the brand value. He is aiming at least a quarter of the overall turnover coming from new products. He is striving to see the company become among the top 10 preferred employer of choice in Sri Lanka.

This he wants to achieve through structured employee engagement, effective transparent communication, an appropriate reward and recognition and fun at work approach. This way he hopes to attract and retain talent to scale up on preferred employer ladder.

He is also determined to gain recognition by winning the world’s most coveted Deming Award for quality by 2016. Using the 5S (Sorting, Simplifying, Sweeping, Standardising, and Self-Discipline of Japanese quality control discipline) approach, commitment to QBM (Quality Business Management) and TPM (Total Productive Maintenance), he is introducing upgradation and stabilisation processes for consistency and achieve predictable results that he is sure would land the company the prestigious Deming Award.

“Through the introduction of a whole range of new product across categories, expansion plans and strong brand building campaigns, we intend to take up our top line and brand value as per our vision,” Rajagopalan said.

Commenting on the plans to meet the vagaries of the competitive global market, he said CEAT Kelani Holdings is already a dominant player in the domestic market and commands a market share of 45%+ across the tyre industry. It is also No.1 in most of the categories in which it is represented.

“Radial is the future and we have carved out fi rm plans to double our capacity within this year. The ordering of equipment has been completed and dispatches and installation are underway. We are already No.1 player in the radial category and we are also exploring further expansion in the same category next year also,” he said in the interview.

The company is also strengthening its market share through the introduction of a series of new sizes in PCR (Mileaze), UVR (Rhino Plus) and SUV (Czar) categories.

“We are also revamping our motor cycle tyre operations and coming out with a revised “Go to Market” strategy through not only adding more new sizes but also by revisiting our logistics and distribution model with separate product management focus.”

Fluctuation in the natural rubber market is a challenge. “However, local availability of NR is a signifi cant plus for our presence in Sri Lanka. We watch the trends of NR closely and try and manage procurements to our advantage,” Rajagopalan explained.

“We as an organisation thrust our focus on operational effi ciencies which in turn mitigates NR fluctuation costs to some extent. Fluctuations in NR are a global phenomenon and cannot be avoided totally.”

On major consumer perceptions that will have a defining impact on the tyre industry, Rajagopalan believes that consumer advocacy will play an increasingly important role in purchase decision-making. The consumers are choosy as they know clearly what they want. They can also turn to technical experts, thanks to the vast amount of information shared instantly and on real time through social media.

 

“Increasingly, vehicles are becoming fashion and status symbols in a large number of middle class homes where tyre brand images have to be in sync or else they will be irrelevant,” Rajagopalan feels. He says branding will become a very important and critical factor in market acceptance than price. “Especially in the passenger car and motor cycle segments, brands are increasingly becoming a key differentiator,” he emphasised.

“Consumer lifestyle, affl uence and social aspirations have created the space for brands to carve out loyal niches in the consumers mind. This phenomenon has helped brands to gain more market share at a higher price premium.”

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