 The Minda Group, India's foremost auto component manufacturer, has announced a major initiative to aggressively target the after-sales market for its range of products. The group, in the first of its kind initiative in the auto component space, announced the roll out of its FMCG model for the after market (replacement market).
Minda Group will roll out the model across the state of Tamil Nadu initially, before taking it across the country. The FMCG model envisages the division of the state into seven different territories identified on the basis of their vehicle population and sales potential. Each of these territories will be serviced by a representative called the Missionary Service Representative (MSR). These representatives will be locally placed and will be responsible for the sales, marketing and servicing within the territory which would range to about a radius of 100 km from the base.
There has been an empirical identification of high potential retailers and garages/electricians - about 150 per territory, who are being brought under the fold as Minda Retail Partners (MRPs) and Minda Service Partners (MSPs) respectively. The Minda distribution network in Tamil Nadu will thus be over 1,000-strong, covering not only major cities in the state but small towns and some prominent villages and rural markets as well.
The Minda MSRs will be provided with motorcycles carrying appropriate Minda branding - such constant presence and visibility in the market, coupled with a strong distribution network will ensure that consumers throughout the state will have access to genuine spare parts as well as quality service back-up. The product and value offering to consumers will get further enhanced over time, as more and more products get added to the Minda range.
Automotive batteries, which are a major thrust area for the Minda group and are slated for launch during the course of 2007 will get the advantage of the FMCG model that is being put in place. The group is targeting 50 per cent of its sales of automotive batteries to come from the after market. The FMCG model will help the group to gauge consumer perception and meet expectations.
"Since the MSRs are going to be in direct touch with the entire chain of distribution from the distributors to the end consumers, we hope to be better placed to service and meet after-market demands than our competition," says N K Minda, managing director, Minda Industries Limited.
"The launch of the FMCG model is an attempt at a paradigm shift in how the auto components are retailed in India," says Arun Nagpal, Business Head, Switch Masters Limited, the marketing arm of Minda Group. Traditionally, auto components in the after-market are either available through OE (vehicle) dealers, or through the spare parts market, comprising a network of authorised dealers/independent wholesale traders who deal in a limited number of items but in large quantities, retailers who deal in a large number of items in limited quantities, and garages/mechanics/electricians who play a major role as influencers of the consumer's purchase decision.
Typically, a vehicle owner would go to a neighborhood garage/workshop/mechanic for any repairs that are required. Once it is determined that a spare part is required, the vehicle owner either leaves it to the garage to purchase the part or on his recommendation, goes across to a nearby retail outlet and purchases the same. Retail outlets and garages usually operate in conjunction with each other. In turn, the wholesale dealers and traders usually have a tie-up with retailers who are offered ready stocks, credit and incentives for particular brands from time to time, in order to promote the same.
Large organisations in the auto components field have typically operated on a 'push' mechanism so far, with incentives and offers made to dealers to stock their products/brands, and in turn push them through the distribution channels to the end consumer. The focus has been more on primary sales to the dealer network, with little or no emphasis on secondary sale through the distribution network and to the end user.
With the FMCG model the attempt is to move towards a distribution model that addresses the entire chain, from the dealer down to the garage/mechanic/workshop, and finally to the consumer himself.
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