Panther tires pricing strategy – Interview based survey

Panther tires pricing strategy - Interview based survey
Panther tires pricing strategy - Interview based survey

This article is based on an interview of pricing manager for Panther Tires. Many questions have been asked about how panther tires make its pricing strategy. It’s about latest pricing of the company and the interview duration was around forty-five minutes.

Interviewer: Where do u work and at what position?

Interviewee: I am working in panther tires limited as an assistant manager.

Interviewer: How many categories of tires are you offering right now?

Interviewee: We are offering 40 types of tires right now. But we are also working on some other types of tires as well.

Interviewer: How do set your price for certain product?

Interviewee: Initially the price is basically decided and set on 3 types of costs i.e. 1) operational 2) maintenance and 3) overheads. Other types of costs include R&D cost, marketing, sales etc. costs are contributing in the costs. Then the manufacturer decides this percentage should be my profit margin according to my costs.

Interviewer: What are the raw materials used and from where you get them?

Interviewee: Raw materials include rubber, carbon, and chemicals etc. and these raw materials are imported from china, Iran, Malaysia etc.

Interviewer: Who are your competitors?

Interviewee: Service tires is the biggest competitor right now. General tires have monopoly in Pakistan, and it is only making tires for cars/jeeps etc. Service tires is only making tires for motorcycle and rickshaw, but we are making tires for agricultural vehicles as well. We are also looking forward to making tires for road machinery as well. Diamond tires and Horry tires are very small companies, but they are also offering tires for bicycle and rickshaw.

Interviewer: Is your product price higher or lower than your competitor?

Interviewee: Our prices are almost the same but due to high number of dealers between the company and consumers the profit margin of the company is low. 

There is welfare association of all the tire companies named as “Rubber manufacturing Association” and Mian Iftikhar is its Chairman.  They all mutually decide tire price brackets and stay within it. The profit margin of Panther tires and service tires are very close to each other. Diamond and Horry tire prices are lower than us.

Interviewer: Do you over any sales or promotions?

Interviewee: We started sale at the end of December 2017 for our dealers which increased our sales and sell the finish products. So, in this way sometimes we decrease our profit margins and increase the sales.

Interviewer: When you launch a new product not offered by any other, what factors you keep in mind to set its price?

Interviewee: If we are launching new product which is only offered by us, we will keep its price a little but higher to have more profit till the competitor can make that product. We will keep the imported products of the same category in mind and keep the price a little lower than the imported one. And if say service launches the same product after some while for price lower than us, we will not decrease the price as we have already attracted the customers and make our market.

Interviewer: What do you think where panther tire is lacking?

Interviewee: Panther tire is not investing in marketing, but service tire is. The production of panther tires is much higher than service but because of the marketing of service tires mostly people only knew about service tire. A survey was conducted in which random motorcyclist were stopped on the roads and asked that which tire they are using more than 200 named service but more than 250 motor cyclist had panther tires in their motorcycles.

Interviewer: Are you looking for any advertising opportunities?

Interviewee: Yes, we are definitely because as it is said “jo dikhta hai who bikta hai”

Interviewer: When you will invest in advertising as it is need for today your profit margins will hit, how will you manage that?

Interviewee: It is said that tire industry is also called “Black Gold” because profit margins are high. We usually think that why the owner is not looking towards this side but because his profit margins are really high, he is not that much interested in the advertising and marketing side of panther tires.

Interviewer: What about the growth of the company?

Interviewee: The Company has vertical growth from past 4 years. We have increased our production by 60%.

Interviewer: Do you do anything to cut your costs?

Interviewee: We are daily researching that how can we make the same quality product by decreasing the price of our raw materials.

Interviewer: Does it affect your quality?

Interviewee: We first perform several tests and then launch the product in the market. We do not compromise on our quality as it will affect our product image.

Interviewer: Who decides the prices?

Interviewee: We have audit department, sales department and finance department which collectively makes a file of all expenses and then a CFO consults it with CEO (khawaja naveed), MD (mian ifitikhar) and director. CFO shares all the data with them and 80% contribution in any pricing decision is of our managing director but it’s a collective decision of the committee.

Interviewer: Does increasing the price affect your sales?

Interviewee: No, we recently increased our prices but there was no difference in the sales, there was no decrease in the sales.

Interviewer: How the changes in atmosphere effect the tire pricing? Do you have different prices for different regions?

Interviewee: Different regions have different prices depending on the data of sale representatives and distributors.

Interviewer: Thank you so much sir for sharing this valuable information with me.

Interviewee: You are most welcome. Feel free to ask any more questions anytime you want.

Author

  • An MBA graduate specialized in Marketing, with proven abilities in digital Marketing, New product development, and advertisement. A professional Digital Marketer, blogger, web marketing services provider, Advertiser, Promotions, and Relationship Marketer. Highly motivated with a great degree of flexibility to adapt to changes, resourcefulness, and commitment to work; ambitious and capable of resolving multiple and complex issues.

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