Pricing strategy of General Tyre Pakistan

The General Tyre and Rubber Company of Pakistan Limited was established in 1963 on a 25-acre plot in Karachi Pakistan. Its production started in 1964. The Company was founded by General Tire International Corporation of the USA. With a complete capacity of only 120,000 Tires once a year.
General Tyres has four market segments to cater to. These are:

  1. The Original Equipment Manufacturers – Vehicle assemblers
  2. The Replacement or the Aftermarket
  3. Government Departments/Institutions
  4. The Export Market
TRANSCRIPTION OF INTERVIEW

To assess the Pricing Strategy of General Tyres, the pricing queries have been conducted from Regional Sales Manager Islamabad and Rawalpindi named Mr. Dawood Javed Satti.

1: What Pricing Strategy is currently followed by General tyre?

Ans: General tyre set its pricing according to the general rule of pricing. And that is Cost plus Profit Margin set by the Top Management.

Cost+Profit Margin= Price

2. How company make the Price Change decision in General tyre?

Ans: The Pricing decision generally made according to the external conditions of the market. According to the situation the Top Management gather data from all the regional offices. Data like competitor’s price, retailers and distributors comments on price change. And their suggestions in response to the change in external environment is gathered by their regional offices. After forecasting, the top management prioritise the components that is to be taken in consideration. Then pass the decided price to all the regional offices.

3. What external Factors affect the Pricing of General Tyre?

Ans: As General tyre deals in rubber industry and the tires made by them are for;

  • Passenger Car tires
  • Light Truck Tires
  • Buses Tires
  • Tractor Tires
  • Motorcycle Tires
  • Rickshaw Tires

And the Raw Material for manufacturing these tires are generally imported from International Markets. Whenever Dollar prices go up or go down, it directly affect the price of the Tires. For that price change has to be made by General Tyre. Another Factor that affect the pricing of General tyre is the utility and demand in the rubber industry. Third factor is the competition in the market. In Pakistan General Tyre is considered a market leader, due to which this factor has minimal effect on price change here. Fourth Factor is the downturn of the economy, Whenever Government changes, the import tariffs it also affect the pricing of tire.

4. How General Tyre respond to the price change due to utility and demand of tires?

Ans: In Off season, General Tyre initiate promotional schemes to the retailers and distributors to make it attractive for customers to purchase. It includes discount offers, Intensive promotion on television and print media to improve sales in off season. This is done by maintaining reserve for off season. At Peak time, there is no need of promotion for General Tyre. As this is the most reliable company and also a market leader in rubber industry.

5. What are your major Competitors in Pakistan market?

Ans: The major competitors of General Tyre are:

  • Servis Tires
  • Panther Tires
  • Diamond Tires
  • Japanese and Chinese tire companies
6. Do General Tyre take every stakeholder on board while making the change in prices?

Ans: Top Management do not decide alone but firstly take all information from stakeholders required to change the prices. And consider their opinions about pricing strategies. Before Price change the report is taken from all regional Sales executive so that the decision is made accordingly. They consider Sales executives that take information from respective Retailers and distributors.

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